Department of Finance
Unearned Premiums and Deferred Policy Acquisition Expenses in Automobile Extended Warranty Insurance
Date of this Version
2002
Document Type
Article
Citation
Journal of Actuarial Practice 10 (2002), pp. 63-96
Abstract
A prorata formula is commonly used to calculate unearned premium reserves in property-casualty insurance. I believe, however, that an exposure-adjusted formula is more appropriate in automobile extended warranties. This paper describes the exposure-adjusted approach to calculate the unearned premium reserves of an automobile extended warranty insurance program, to test the adequacy of the calculated reserves, and to determine the allowable deferred policy acquisition expenses from an insurance company's perspective.
Included in
Accounting Commons, Business Administration, Management, and Operations Commons, Corporate Finance Commons, Finance and Financial Management Commons, Insurance Commons, Management Sciences and Quantitative Methods Commons
Comments
Copyright 2002 Absalom Press