What is base surplus in SAP FS-PM - Policy Management?

SAP Term: base surplus

• Component: FS-PM

• Component Name: Policy Management

• Description: Surplus type in life insurance. Contracts with premium obligation receive base surpluses as a percentage of the yearly premium. The base surplus share is allocated at the start of a premium payment section, for the first time at the start of the contract. Other surplus types include interest surplus and final surplus.

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• Key Concepts: 
  Base surplus is a feature of the FS-PM Policy Management component of SAP. It is a tool that allows users to define and manage the financial parameters of their insurance policies. It enables users to set up and manage the base surplus, which is the amount of money that must be held in reserve in order to cover any potential losses. 
  
  How to use it: 
  In order to use the base surplus feature, users must first define the base surplus parameters in the FS-PM Policy Management component. This includes setting up the base surplus amount, as well as defining any additional parameters such as the frequency of payments and any applicable taxes or fees. Once these parameters have been set up, users can then manage their base surplus by making adjustments to the parameters as needed. 
  
  Tips & Tricks: 
  It is important to remember that the base surplus should be set up and managed carefully, as it can have a significant impact on the financial performance of an insurance policy. Additionally, it is important to keep track of any changes made to the base surplus parameters, as these changes can also affect the financial performance of an insurance policy. 
  
  Related Information: 
  For more information on how to use and manage the base surplus feature in FS-PM Policy Management, please refer to SAP’s official documentation on this topic. Additionally, there are many online resources available that provide helpful tips and tricks for managing your base surplus.