When a non-life
insurance company closes a contract to provide
insurance against loss, the
revenues (premiums) expected to be received over the
life of the contract are called gross premiums written.
Insurance companies often purchase
reinsurance to protect themselves against the risk of a
loss above a certain threshold; the cost of reinsurance
(reinsurance premiums) is deducted from gross premiums
written to arrive at net premiums written.
Under accrual-basis accounting, only premiums pertaining to the relevant accounting period are recognized as revenues. These premiums are called net premiums earned.