The payment, or one of the periodical payments, a policyholder agrees to make for an insurance policy.
Premiums and fees
Premiums and fees in the EVM income statement represent the present value of all estimated future premiums and fees on contracts written during the year. Gross premiums and fees represent premiums and fees before external retrocessions. Gross premiums and fees in the EVM income statement of the business segments also exclude retrocessions to other segments of the Group.
Premiums an insurance company has recorded as revenues during a specific accounting period.
Premiums for all policies sold during a specific accounting period.
Present value of future profits (PVFP)
Intangible asset primarily arising from the purchase of life and health insurance companies or portfolios.
Principal Investments and Acquisitions
Principal Investments and Acquisitions is a unit of Swiss Re that manages all strategic acquisition activities of the Group as well as a portfolio of minority holdings in primarily insurance and insurance-related businesses with the goal of generating long-term value.
Product liability insurance
Insurance covering the liability of the manufacturer or supplier of goods for damage caused by their products.
Professional indemnity insurance
Liability insurance cover which protects professional specialists such as physicians, architects, engineers, lawyers, accountants and others against third-party claims arising from activities in their professional field; policies and conditions vary according to profession.
Profit margin is calculated for new business, previous years’ business and investment activities. The new business profit margin is the ratio of new business profit/loss to EVM capital allocated to new business over the lifetime of the business. The previous years’ business profit margin is the ratio of previous years’ business profit/loss to EVM capital allocated to previous years’ business in the current year. Investment profit margin is the ratio of investment profit/loss to EVM capital allocated to investment activities in the current year. These ratios can be used to compare profitability across all underwriting and investment activities on a consistent, risk-adjusted basis.
Collective term for fire and business interruption insurance as well as burglary, fidelity guarantee and allied lines.
Form of reinsurance arrangement in which the premiums earned and the claims incurred of the cedent are shared proportionally by the cedent and the reinsurer.
Provision for capital costs
Frictional capital costs provide compensation to shareholders for agency costs, costs for potential financial distress and regulatory (illiquidity) costs. Frictional capital costs include risk capital costs and funding costs. Risk capital costs are charged at 4.5% of eligible economic capital which consists of ENW and eligible hybrid debt. Funding costs are charged or credited at the legal entity level depending on the liquidity the respective legal entity uses or generates. In addition, the provision for capital costs includes an allowance for double taxation on the risk free return on capital allocated to underwriting activities.