When you calculate insurance premiums based on the fact that she needs to cover the expected claims of the period of insurance to establish insurance funds to cover the costs of litigation, and also provide a certain amount of profit. In addition, please note that the size of the premiums influence the amount and structure of insurance portfolio management expenses of an insurance company.
Calculate the insurance premium based on the insurance rate that is a rate of insurance premium per one insurance object. Tariffs on compulsory types of insurance regulated by law and are set centrally. The rate for voluntary insurance company has the right to establish independently. That is the insurance premiums from voluntary insurance have a significant impact on the financial stability of the insurer.
Remember that the insurance premium is always determined on the basis of the rate of insurance, insurance amount and other factors and is reflected in the insurance policy. Perform the calculation of the insurance premium by multiplying the base tariff rates on a variety of factors. For example, in motor insurance the basic factors depend on the technical characteristics and purpose of the car, areas of use, number of drivers, length of operation, presence of anti-theft tools, insurance history of the drivers, etc.
Calculating the amount of the insurance premium (gross premium) please note that it is divided into two parts: the net premium and loading. The first one is used for the formation of insurance reserves of the organization and insurance payments. The second part, as a rule, less is spent on maintenance of activity of the insurer and the formation of profit.
When included in the contract of insurance deductibles must keep in mind that the insurance premium is reduced by the value of the product of the insurance rate on the excess amount. In this case, it is calculated according to the formula:
P = TB (s-f) where: TB tariff gross rate; S – the sum insured; f – the size of the franchise.