RA for LIC or LRC
In the example below should we understand "expired premium" for LIC as earned premium and "premium" for LRC as unearned premium? Otherwise what would be the difference between the 2 premium amounts?
And what would be the interpretation of UW risk being included in LRC but not in LIC?
Comments
Yes, your interpretation is right. UW risk is the risk inherent in writing new policies. For LRC, there is that risk since you have not written those policies or provided coverage yet. For LIC, the policies are already written and coverage already provided, which means there is no UW risk left but rather reserving risk