Multi-Pronged Risk Management and Protection Philosophy
Glossary (Part 1)
■ APE (Annualized Premium Equivalent) - The sum of annualized first year regular premiums and 10%
weighted single premiums and single premium top-ups
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Backbook surplus - Surplus accumulated from historical business written
■
Conservation ratio - Ratio of current year renewal premiums to previous year's renewal premium and
first year premium
■
Embedded Value Operating Profit ("EVOP")
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Measure of the increase in the EV during any given
period, excluding the impact on EV due to external factors like changes in economic variables and
shareholder-related actions like capital injection or dividend pay-outs.
First year premiums - Regular premiums received during the year for all modes of payments chosen by
the customer which are still in the first year. For example, for a monthly mode policy sold in March 2021,
the first instalment would fall into first year premiums for 2020-21 and the remaining 11 instalments in
the first year would be first year premiums in 2021-22
◉
New business received premium - The sum of first year premium and single premium.
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New business strain - Strain on the business created due to revenues received in the first policy year.
not being able to cover for expenses incurred
HDFC
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