Glossary
Glossary
| Term | Meaning |
|---|---|
| Gross Written Premium (GWP) | Reflects direct insurance business only. At an industry level, this excludes inwards reinsurance business written by direct insurers. Excludes the Fire Services Levy. |
| Gross premiums or Gross Earned Premium (GEP) | Analogous to Insurance Revenue. Excludes the Fire Services Levy. |
| Outward Reinsurance Expense | This is net of commission revenue (per AASB 17). Includes the terrorism levy. |
| Net premiums or Net Earned Premium (NEP) | This is net of commission revenue. Analogous to net insurance revenue (insurance revenue minus outward reinsurance expense). Excludes the Fire Services Levy. |
| Net Loss Ratio | Net claims expense as a % of net premiums. Includes impacts of risk margin/adjustment and CHE provision movements, discounting impacts and LAT/onerous contracts losses. |
| Net Expense Ratio |
Expenses as a % of net premiums. Comprises both: • ‘above the line’ underwriting or insurance-related expenses (which are allocated to class of business within the APRA statistics); and • ‘below the line’ other expenses, partially offset by other income (both of which we have allocated to class of business using APRA’s historical institution-level information and our knowledge of product mix by insurer). This is on the gross of commission revenue basis (with commission revenue allowed for in the outward reinsurance expense), and includes unallocated claims handling expenses. Excludes the Fire Services Levy. |
| Net Combined Operating Ratio (Net COR) | Sum of net claims expenses and total expenses (including other expenses net of other income) all divided by net premiums. |
| Insurance Trading Margin (ITR) | (1 – Net COR + investment income on technical provisions). Expressed as a proportion of net premiums. |
| Return on Equity (ROE) | Net profit as a % of net assets. Equates to the ITR with an allowance for investment return on shareholder’s funds and net of tax. |