2006-06-29 00:31:33 · 3 answers · asked by 5056808205 1 in Business & Finance ➔ Insurance
Well, it varies from state to state, and with the policy type. Would you like a homeowners example, or an auto example?
2006-06-29 01:41:23 · answer #1 · answered by Anonymous 7 · 0⤊ 0⤋
This is done by actuaries calculated the risk that the policy will have to be paid for a given population. The rates are set using these calculations. All are based on probability.
2006-06-29 12:11:31 · answer #2 · answered by Kenneth H 5 · 0⤊ 0⤋
Actuaries look at their total claims and premium experience, adjust the claims experience to future conditions (for inflation, etc.), adjust the premium experience to future conditions (to adjust to the current set of rates being used), factor in company expenses and a desired profit loading, and then claculate what the new rates should be to achieve this desired profit.
2006-06-29 23:31:30 · answer #3 · answered by fcas80 7 · 0⤊ 0⤋