Glossary
Definition of Financial Metrics
Financial Year
12-month accounting period that a business uses for financial and tax reporting purposes.
Compound Annual Growth Rate
Annualized rate of return of a financial metric over a defined period.
Combined Ratio
Measures the profitability and financial health of an insurance company.
Combined Ratio
=
Net Claims Incurred+Net Commission+Management Expenses
Net Earned Premium
Gross Direct Premium
Total amount of premiums collected by direct insurance business without deduction for commission or brokerage.
Gross Written Premium
Total amount of premiums that an insurance company has charged for policies issued.
Management Expenses
Expenses incurred in the administration of an insurer which are not included for settling claims.
Net Claims Incurred
The total amount of claims paid is adjusted by the change in the claims provision.
Net Claims Incurred Ratio
Measures the proportion of claims incurred to earned premiums.
Net Claims Incurred Ratio
=
Net Claims Incurred
Net Earned Premium
Net Commission
Fee paid to an agent or broker as a percentage of the premium.
Net Earned Premium
Amount of premiums that an insurance company recognizes as earned revenue based on the time elapsed.
Penetration Rate
Indicates the level of development of insurance sector in a country.
Penetration Rate
=
Premium
Gross Domestic Product
Definition of Line of Business
Motor
Protects the individual against financial losses in the event of an accident involving private car, motorcycle, and commercial vehicle.
Fire
A type of property insurance that provides financial protection against losses caused by fire.
Personal Accident
Provides compensation in the event of injuries, disability or death caused solely by violent, accidental, external and visible events.
Medical and Health
Covers the cost of private medical treatment, such as the cost of hospitalization and healthcare services.
Marine, Aviation and Transit
Covers the loss of marine cargo, air cargo, land transit, marine hull, operation of aircraft and oil and gas exploration.
Miscellaneous
Refers to workmen’s compensation, liability insurance, bonds and other types of insurance not falling within any of the above classifications.