Glossary

PE ratio

A financial ratio for evaluating shares. The price-earnings ratio is the ratio of the share price to the earnings per share in a reference period, or to the expected earnings per share in a future period. If the reference period is defined as one year, the price-earnings ratio is the end-of-year price divided by the earnings per share in that year.

Personal insurance

Personal insurance includes all insurance that covers personal risks (such as life insurance, health insurance and accident insurance).

Premium

Agreed fee paid in exchange for assumption of risk by an insurance company.

Premiums written

Direct business premiums written are comprised of set premiums, plus policyholder collateral payments, but not including insurance or fire service taxes, reduced by premiums cancelled during the financial year. In indirect business, the premiums written correspond to the premiums that the ceding insurer has indicated for offset.

Present value

Current value of future cash flows, calculated by discounting with a certain discount rate.

Price-earnings ratio

A financial ratio for evaluating shares. The price-earnings ratio is the ratio of the share price to the earnings per share in a reference period, or to the expected earnings per share in a future period. If the reference period is defined as one year, the price-earnings ratio is the end-of-year price divided by the earnings per share in that year.

Profit participation

See profit-related premium refunds.

Profit-related premium refunds

The policyholder’s profit participation in the profit of the insurance class in question (mandatory for traditional life insurance).

Profit-unrelated premium refunds

Contractually accorded refund of premiums to the policyholder.

Provision for unearned premiums

Unearned premiums are the portion of premiums written that were specified for the period following the balance sheet date and are therefore not included in the income for the financial year. These premiums are used to cover obligations arising after the balance sheet date.