- #1
shivajikobardan
- 637
- 54
- Homework Statement
- Large loss what is that?
- Relevant Equations
- None
Large loss-:
Book says
" The size of loss must be meaningful from the perspective of the insured. Insurance premiums need to cover both the expected cost of losses, plus the cost of issuing and adminstering the policy, adjusting losses and supplying the capital needed to reasonably assure that the insurer will be able to pay claims. For small losses, these latter costs may be several times the size of the expected cost of losses. There is hardly any point in paying such costs unless the protection offered has real value to the buyer."
is it trying to say insurance premim need to cover=insurer cost+etc money
so if insurer cost<etc money, don't offer it?
Book says
" The size of loss must be meaningful from the perspective of the insured. Insurance premiums need to cover both the expected cost of losses, plus the cost of issuing and adminstering the policy, adjusting losses and supplying the capital needed to reasonably assure that the insurer will be able to pay claims. For small losses, these latter costs may be several times the size of the expected cost of losses. There is hardly any point in paying such costs unless the protection offered has real value to the buyer."
is it trying to say insurance premim need to cover=insurer cost+etc money
so if insurer cost<etc money, don't offer it?