Written Premium — New Policy Issued
Recording the full annual premium when a new motor or property insurance policy is issued.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Premium Receivable / Cash | Asset (+) | 1,200.00 | - |
| Written Premium (Gross) | Revenue (+) | - | 1,200.00 |
💡 Accountant's Note
Written premium is the total premium contractually due on a policy written during the period. It is the gross amount before reinsurance cession. Earned premium is recognized separately as time passes.
Practitioner & Systems Framework
💻 ERP Architecture
In insurance ERP platforms (e.g., Guidewire PolicyCenter, Oracle Insurance, or SAP FS-PM), the written premium is posted automatically when the policy is bound and issued. The policy system generates the accounting entry via an API feed to the general ledger. Premium receivable is created per policy and linked to the billing schedule. In SAP, the entry is posted to FI-CA (Contract Accounting) sub-ledger with the GL reconciliation account updated in real time.
⚠️ Audit Flags
Auditors verify that written premium is recorded in the correct policy inception period — not when cash is received. Key tests include cut-off testing around period-end (policies bound before year-end but issued after), tracing premium receivables to signed policy documents, and confirming that gross written premium equals the sum of earned premium plus unearned premium reserve at period-end.
📄 Required Documentation
Signed policy schedule, premium computation sheet, underwriter's acceptance note, policy issuance confirmation from the policy admin system, and the billing/instalment schedule if applicable.
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Expert Analysis by Qusai Ahmad
General Accountant Supervisor & IFRS Specialist
Specialized in SAP GUI automation and Middle Eastern tax compliance. Building digital tools for the next generation of finance leaders.