The risk (insurance risk) that is associated with claims that are likely to arise in the future on a policy or an insurance contract that has already come into effect (in the current period). Unexpired risks are those that are still does exist at a period end, where part of the term of the contract has already lapsed (expired), while the remainder is still to lapse in the future.
Unexpired risks are designated as coverage of future damage, loss or injury, or accident, claims and costs arising from the insurance contracts in force. An insurance company creates a specific provision (unexpired risk provision, URP) for unexpired risks, being the difference between an expected value of future compensations, claims and costs and the aggregated amount of provision for unearned premiums (UEP) and possible expected future premiums under the insurance contracts in force.
Provisions for unexpired risk may also be calculated by using actuarial methods.
Comments