These amounts can be sizable for some products and in some situations (such as during an economic expansion for audit premium or after a major catastrophe for reinstatement premium). Therefore, delaying recognition of this revenue until the premium is charged could result in distorted earnings reports. How can they be reflected in revenue, when their amount, timing and/or assignment to individual policies is uncertain? One way is to record as written premium an estimate of their amount. This requires a slight deviation from the previously provided definition of written premium as the amount of premium charged.
