Let us assume the volume measure needs to be determined for the reference date of 31 December of year N with regard to a one-year renewable contract. Let the date of recognition of the contract be 1 December of year N and the date of inception 1 February of year N+1. The obligations of the possible renewals with inception dates 1 February of the years N+2, N+3 etc. are assumed to be beyond the contract boundary of the existing contract. The contract includes an automatic renewal provision as described in the question and the advance notification is provided on 1 December of each year.

1/ The term Ps should include the premiums to be earned during the 12 months after the reference date. For the example contract that are the first 11 months of premiums for the period from 1 February N+1 to 31 December N+1.

2/ The term FP_existing should include the premiums to be earned after the following 12 months for existing contracts. For the example contract that is the last month of premiums for the period from 1 to 31 January N+2.

3/ The term FP_future should include the premiums to be earned for contracts where the initial recognition date falls in the following 12 months but excluding the premiums to be earned during the 12 months after the initial recognition date.

In the case of the example contract, the date of advance notification to the policyholders (i.e. 1 December N+1) is the initial recognition date for the obligations of the renewal of the contract. That renewal date is within the following 12 months. Therefore FP_future includes the premiums that relate to the renewal and are earned after the 12 months after the initial recognition date. That are the premiums of the two months from 1 December N+2 to 31 January N+3. Where the renewal is not certain the premiums need to be weighted with the probability of renewal.