Net claims paid is obtained by totaling (adding or subtracting as indicated) items ① to ④ listed to the right, and plainly shows the amount of insurance claims paid. The payment of insurance claims is the main expenditure involved in the non-life insurance business.
①Direct claims paid
−) ②Reinsurance claims ceded
+) ③Reinsurance claims paid
−) ④Retrocession claims ceded
⑤Net claims paid
(Income statement item)