Page 189 - Ebook health insurance IC27

Sashi Publications

collected/received by the Bureau. Users can access specific information only
with the permission of IRDA. IRDA also reserves the rights to impose
restrictions on use/publication of findings from the data.

Q5. State the various parameters on which analysis of data may be performed
Ans. Analysis of data can be performed on various parameters and at different levels of

complexity. They are as follows:
(a) Written Premium - This is the premium received by an insurer in a particular

period. This analysis can show the number of people covered and policy
premium received by type and by written policy year for each underwriting
office. This helps in identifying the average premium (on per person basis) by
group and individual policies. This helps the insurer to focus on weak areas of its
sales and marketing efforts. This will also help monitor the result of rate actions
taken by the various underwriting offices.

(b) Earned Premium - The portion of an insurance written premium which is
considered 'earned' by the insurer, based on the part of the policy period that the
insurance has been in effect, and during which the insurer has been exposed to
loss. This analysis can segment the written premium for each of the policy years
into earned premium for the current year, and also the next year into which the
coverage continues. The calculation of earned premium has two major uses :
(i) it matches exactly with the claims incurred during a particularperiod enabling
proper loss ratio analysis for a specific period and
(ii) it helps in calculating the unearned premium reserve at the end of the
accounting period. This helps in analysis of the performance of different
products via loss ratio (i.e, incurred claims divided by earned premium).
This again helps to calculate the unearned premium, which is to be shown in
financial statement.

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