UPR Calculation CH1 pg13

Discussion in 'SP8' started by Pooja, May 31, 2022.

  1. Pooja

    Pooja Made first post

    An insurance company calculates its UPR using an individual, policy by policy approach. Calculate the UPR as at 31 December 2018 for the following annual policies:

    (b) Premium £3,500. Commission 10%. Started 1 July 2018. Risk starts at zero and increases daily by a constant linear amount over the policy year.

    Can someone explain how to solve this ?

    solution given - £2,362.50 (75% of risk is outstanding at year-end, so the UPR is 75% of 90% of £3,500. Did not understand how 0.75 came ?
  2. Ian Senator

    Ian Senator ActEd Tutor Staff Member

  3. Busy_Bee4422

    Busy_Bee4422 Ton up Member

    The book Pricing in General Insurance has an example spreadsheet with earned premium calculations if you want to see an alternative presentation.

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