A portion of an insurance policy‘s premium that corresponds to the expired part of the policy- that is, that part to which an insurance firm has the right to report it on its financial accounts as actually “earned”.
Insurance premiums are typically paid in advance for a given coverage period, but insurers only “earn” the respective part of a premium at an even rate over the course of the policy term. The unearned portion, though paid to the insurer in advance, is recognized in its accounts as an “unearned premium reserve.”
Earned premiums are known for short as EPs.
