What is Annualized Premium Equivalent?
Annualized Premium Equivalent is a commonly used measure to determine the business sales in life insurance field. It is computed by the sum of regular annualised premium which came from new business and 10% of the first standalone premium over the same stated period. The premium so earned by the firms can be extended to stand for all revenues earned by the given business. It is thus calculated by the below-written method:
APE=Annualised Regular Premium+10% of single premium which also includes top-up premium
In the above, Annualised Regular Premium=Premium amount *Frequency of Billing