Unearned Premiums Archives - FinanceFacts101

A balance scale with half representing earned premiums in gold coins and the other half depicting unearned premiums as silver coins.

Understanding Unearned Premiums: An Essential Component of Insurance Contracts

August 21, 2025 FinanceFacts101 Insurance

Introduction: What are Unearned Premiums? Unearned premiums represent the portion of insurance policy premiums that insurers have collected but not yet “earned” because coverage has not yet been fully provided. This is common in insurance contracts where clients pay their annual or semi-annual premiums upfront. Unearned premiums are significant as

Understanding the Kenney Rule: A Key Ratio for Insurance Company Solvency

January 27, 2025 FinanceFacts101 Insurance

Introduction to the Kenney Rule The Kenney Rule, also known as the Kenney Ratio or the 2-to-1 rule, is a crucial benchmark for assessing insurer solvency. Developed by Roger Kenney, an expert in insurance finance, this ratio sets a target of unearned premiums to an insurer’s policyholders’ surplus at 2-to-1.