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The loading of insurance premium is a corresponding amount of money to the insurance of a specific risk and must comprise the following :-
A) Mathematical calculation regarding the degree of risk exposure.
B) Adminstration and managment expenses.
C) Risk history or claims record.
D) safety precautions.
E) Finally we may consider the previous insurance premium rates for the similar risks.
All the above- mentioned participate in the insurance prmium loading , however their respective shares to such loading depending on the underwriter's assessment.
Thanking You.
When any claim (which is not a recoverable claim from third party) is paid under a prticular policy period, at the time of subsequent renewal of same policy, apart from normal rate of premium an additional premium is being charged in proportion to the claim paid.
when a claim is paid under a policy, an additional premium is charged in proportion to the claim to remew the policy.
Calculations as per the risk exposure
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