Hi, Can someone help me to understand what is baseline profit and what is the difference between uw results ( losses - premium + expenses) and baseline profit ? thank you very much
The term baseline profit is not specifically defined anywhere in the course materials and it is only referred to once in the Core Reading on page 10 of Chapter 21, where it is referring to the expected profit on a book of business. This will therefore likely include all sources of profit, such as investment income. Underwriting profit is the excess of earned premiums over incurred claims and expenses. It is a crude measure of trading profit as it does not allow for all sources of profit, such as investment income.
