Definition of "Retained earnings"
Boyce Grooms, Real Estate Agent
Century 21
Net profit of a business, less dividends. Reinvestment of retained earnings enables an insurance company to write more business from a stronger capital base. Contributions to retained earnings come from three sources: excess interest from investment earnings; loss savings (fewer and/or smaller losses than were loaded into premiums); and expense savings (less expense costs than were loaded into premiums).
Have a question or comment? We're here to help.