What is Original Insurance Premium Income?

336 reads · Last updated: December 5, 2024

Original insurance premium income refers to the insurance premiums collected by the insurance company from the insured during the insurance period as stipulated in the insurance contract. Original insurance premium income is one of the main sources of income for insurance companies and is also an important indicator of their operating performance.

Definition

Original insurance premium income refers to the insurance fees collected by an insurance company from the insured during the insurance period as agreed in the insurance contract. It is one of the main sources of income for insurance companies and a key indicator of their business performance.

Origin

The origin of the insurance industry can be traced back to ancient maritime trade, where merchants shared risks to protect their goods. Over time, insurance evolved into a formal financial service, with companies systematically collecting premiums to provide coverage.

Categories and Features

Original insurance premium income can be categorized into life insurance, property insurance, and health insurance. Life insurance typically involves long-term contracts with stable premium income; property insurance often involves short-term contracts with more volatile premium income; health insurance varies with changes in medical expenses. Each type of insurance premium income reflects its specific risks and market demands.

Case Studies

Case 1: Ping An Insurance significantly increased its original insurance premium income in 2020 by enhancing the market promotion of its health insurance products. By analyzing market demand, Ping An successfully attracted more customers, increasing its revenue sources. Case 2: AIA improved customer satisfaction and premium income in 2019 by optimizing its life insurance product portfolio. By offering more competitive products, AIA captured a larger market share.

Common Issues

Investors often misunderstand the relationship between original insurance premium income and net profit. While premium income is a major source of revenue for insurance companies, it does not directly equate to net profit, as claims, operating costs, and other expenses must be deducted. Another common issue is excessive optimism about premium income growth, overlooking the importance of market competition and risk management.

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