Net Premiums
Net premiums are defined as actual premiums plus premium supplements less the insurance service charge payable by the policyholders.
Because of the way in which the value of the service output is defined, net premiums for non-life insurance are equal in total to adjusted, and not actual, claims. Any variation between adjusted and actual claims represents a transfer between the policyholders and the insurance corporation. Over time, a transfer in one direction is offset by one in the other.