Cash Flow Surplus

What Does Cash Flow Surplus Mean?

A cash flow surplus occurs when an insurance company accumulates an amount of cash during a specific period that exceeds its expenses. When an insurance company has a cash flow surplus, it can invest the surplus funds, reinvest them in the business, or save them for future use.

Insuranceopedia Explains Cash Flow Surplus

A cash flow surplus is typically a strong indicator that an insurance company is performing well and that its statistical calculations are accurate. In other words, it signifies that the company is generating more income from premiums and other sources than it is spending.