GIM2091 - Accounting framework: annual accounting: comparison of accident year and underwriting year reporting: example
Policy incepts on 1 January 2008; two year duration.
Premium £1000.
Claims £750 - £400 made in 2008 and £350 made in 2009.
80% of claims paid in year of claim and remaining 20% in following year.
Accident year basis
|
|
|
Annual accounts |
|
||
|---|---|---|---|---|---|
|
|
|
2008 |
2009 |
2010 |
Total |
| Accident years |
|
|
|
|
|
| 2008 |
|
|
|
|
|
|
|
Premium paid |
1000 |
|
|
|
|
|
Unearned premium provision c/f |
(500) |
|
|
|
|
|
Premium earned |
500 [A] |
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding claims b/f |
0 |
|
|
|
|
|
Claims paid |
320 |
|
|
|
|
|
Outstanding claims c/f |
80 |
|
|
|
|
|
Claims incurred |
400 [B] |
|
|
|
|
|
|
|
|
|
|
|
|
Profit [A] - [B] |
100 |
|
|
|
|
|
|
|
|
|
|
| 2009 |
Premium paid |
|
0 |
|
|
|
|
Unearned premium provision b/f |
|
500 |
|
|
|
|
Unearned premium provision c/f |
|
0 |
|
|
|
|
Premium earned |
|
500 [C] |
|
|
|
|
|
|
|
|
|
|
|
Outstanding claims b/f |
|
(80) |
|
|
|
|
Claims paid |
|
360 |
|
|
|
|
Outstanding claims c/f |
|
70 |
|
|
|
|
Claims incurred |
|
350 [D] |
|
|
|
|
|
|
|
|
|
|
|
Profit [C] - [D] |
|
150 |
|
|
|
|
|
|
|
|
|
| 2010 |
Premiums paid/earned |
|
|
0 |
|
|
|
|
|
|
|
|
|
|
Outstanding claims b/f |
|
|
(70) |
|
|
|
Claims paid |
|
|
70 |
|
|
|
Outstanding claims c/f |
|
|
0 |
|
|
|
Claims incurred |
|
|
0 |
|
|
|
|
|
|
|
|
| Summary of profit |
|
100 |
150 |
0 |
250 |
|
|
|
|
|
|
|
Underwriting year basis
| Annual accounts | |||||
|---|---|---|---|---|---|
|
|
|
2008 |
2009 |
2010 |
Total |
| Underwriting year |
|
|
|
|
|
| 2008 |
|
|
|
|
|
|
|
Premium paid |
1000 |
0 |
|
1000 |
|
|
Unearned premium provision b/f |
0 |
500 |
|
500 |
|
|
Unearned premium provision c/f |
(500) |
0 |
|
(500) |
|
|
Premium earned |
500 |
500 |
|
1000 |
|
|
|
|
|
|
|
|
|
Outstanding claims b/f |
0 |
(80) |
(70) |
(150) |
|
|
Claims paid |
320 |
360 |
70 |
750 |
|
|
Outstanding claims c/f |
80 |
70 |
0 |
150 |
|
|
Claims incurred |
400 |
350 |
0 |
750 |
|
|
|
|
|
|
|
|
|
Net profit |
100 |
150 |
0 |
|
|
|
Profit |
|
|
|
250 |
