Annualised premium equivalent

The standard measure of new business volume for a life insurer: regular premiums plus one-tenth of single premiums, so that a one-off payment is not counted as though it repeated every year.

An insurer writing ₹2,700 crore of regular premium and ₹3,000 crore of single premium reports ₹3,000 crore of annualised premium equivalent.

Without the adjustment, a company could show explosive growth by selling single-premium products, which are lower margin and do not build a recurring book.

It is the denominator of the new business margin, so the two are always read together.