Annual Premium Equivalent - APE

AAA

DEFINITION of 'Annual Premium Equivalent - APE'

A common sales measure technique used by insurance companies in the United Kingdom where the sales of a given entity are estimated by taking the value of regular premiums, plus 10% of any new single premiums written for the fiscal year. The premiums earned by a firm can be extended to include all revenues of a given firm.

INVESTOPEDIA EXPLAINS 'Annual Premium Equivalent - APE'

When estimating any future metric, it is important to consider any unforeseen events, and how these events may impact your estimate. For example, when forecasting a firm's sales revenues, you would want to consider the competition and what there product lines and pricing strategy will be over the forecasting period.

This will allow you to fine-tune your estimate, which will hopefully be more applicable, and provide you with a margin of safety.

RELATED TERMS
  1. Consensus Estimate

    A figure based on the combined estimates of the analysts covering ...
  2. Earnings Estimate

    An analyst's estimate for a company's future quarterly or annual ...
  3. Earnings Surprise

    Occurs when a company's reported quarterly or annual profits ...
  4. Forecasting

    The use of historic data to determine the direction of future ...
  5. Earnings Recast

    The act of amending and re-releasing a previously released earnings ...
  6. Margin Of Safety

    A principle of investing in which an investor only purchases ...
Related Articles
  1. Fundamental Analysis

    Great Expectations: Forecasting Sales Growth

    Predicting sales growth can be something of a black art, unless you ask the right questions.
  2. Options & Futures

    Forecasting Market Direction With Put/Call Ratios

    Options are not only trading instruments but also predictive tools that can help us gauge the feelings of traders.
  3. Markets

    Surprising Earnings Results

    Consensus estimates can send stocks spiraling - but are they representing reality?
  4. Professionals

    Style Matters In Financial Modeling

    If you're looking to get a job as an analyst, you'll need to know how to work it.
  5. Insurance

    How to Use a Waiver of Subrogation

    A waiver of subrogation means that a party to a contract waives the right to allow someone (usually an insurance company) to sue the other party to the contract in case of a loss.
  6. Retirement

    What is an equity-indexed annuity?

    Understand what an equity-indexed annuity is, its advantages and disadvantages, and how it differs from other annuity investments.
  7. Insurance

    What are some examples of unexpected exclusions in a home insurance policy?

    Learn about commonly excluded perils with different standard insurance policies. Explore events that homeowners should consider when purchasing insurance.
  8. Insurance

    What are the tax implications of a life insurance policy loan?

    Learn the instances in which you are required to pay taxes on a life insurance policy loan, so you can avoid making a costly mistake.
  9. Insurance

    What's the difference between renter's insurance and homeowner's insurance?

    Renters insurance and homeowners insurance offer similar benefits for occupants and homeowners, but in different ways and for different reasons.
  10. Insurance

    How the Affordable Care Act Changed Insurance

    6 Ways Obamacare Impacts the Health Insurance Marketplace

You May Also Like

Hot Definitions
  1. Treasury Bond - T-Bond

    A marketable, fixed-interest U.S. government debt security with a maturity of more than 10 years. Treasury bonds make interest ...
  2. Weight Of Ice, Snow Or Sleet Insurance

    Financial protection against damage caused to property by winter weather specifically, damage caused if a roof caves in because ...
  3. Weather Insurance

    A type of protection against a financial loss that may be incurred because of rain, snow, storms, wind, fog, undesirable ...
  4. Portfolio Turnover

    A measure of how frequently assets within a fund are bought and sold by the managers. Portfolio turnover is calculated by ...
  5. Commercial Paper

    An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories ...
  6. Federal Funds Rate

    The interest rate at which a depository institution lends funds maintained at the Federal Reserve to another depository institution ...
Trading Center