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The method and basis for calculating premiums.
Insurance premium - the price of insurance services, are in the withdrawal of the financial implications of risk and the obligation to pay the insurance indemnity in case of an insured event.
The premium is set when signing the insurance contract and remains unchanged during the period of its validity, unless otherwise specified terms of the contract of insurance, the insurance premium should be sufficient to:
- cover the expected claims during the insurance period;
- cover the costs of insurance companies to conduct business;
- ensure profits.
- tariff net rate
The premium consists of four elements:
- pure net premium
- risk-taking bonus
- load on the cost of the insurance company
- allowance for profit
Net rate – this funding payments upon the occurrence of insured events and the formation of insurance reserves.
Load – is payment of expenses of the insurer, including:
- wages;
- lease;
- commission;
- etc.
Allowance for profit is needed for the formation of profit.
We compute the value of a particular base. In the property insurance – the cost of property insurance in life insurance – the sum insured.
Insurance rate – a ratio of premium to the database.
The degree of insurance risk associated with a specific object and scope of insurance liability.
It is designed to distinguish between insurance rates on short-term, which may be higher or lower than the calculated rates.
In constructing the insurer decides to double tariffs and controversial task, with a minimum insurance premium to ensure the maximum amount of insurance liability.
The main objective of the insurance company to calculate correctly the net premium, and the use of the data probability and statistics, and calculations are called actuarial. A person engaged in actuarial calculations, called – Actuary.
In calculating the net rate taken on the basis of equality P = C, where P – insurance payments related net rate, C – insurance compensation.
In calculating the Net-rates across a variety of types of property uses a single indicator of loss amounts insured.
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