Premiums

Erwin Straub
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Erwin Straub: Swiss Reinsurance Company

Chapter Chapter 3 in Non-Life Insurance Mathematics, 1988, pp 52-67 from Springer

Abstract: Abstract The premium is the price for the good “insurance” (or “reinsurance”) sold by the insurance industry. So, as with any other industry, the right pricing—which is here called “rating” — is vital since too low a price level results in a loss, while with too high rates a company or a whole sector of the insurance industry can price itself out of the market. On top of this, premiums and tariffs are often a political subject, particularly so of course with lines of business such as Social Security, Motor Liability and Health insurance. And finally also the insurance supervisory authorities have a peculiar interest in premiums and rate levels since, if they approve too low prices, they would share the guilt if a company went bankrupt and, if they support inappropriately high rates, they could be criticised for helping the industry become rich at the cost of the man in the street.

Keywords: Insurance Industry; Exponential Utility; Mass Line; Initial Reserve; Pragmatic Principle (search for similar items in EconPapers)
Date: 1988
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-662-03364-7_3

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DOI: 10.1007/978-3-662-03364-7_3

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