Gross premium of an insurance organization and its structure. Gross bonus and its structure

Insurance premium- (also gross premium) (insurance premium, insurance payment) payment for insurance that the policyholder is obliged to pay to the insurer in accordance with the insurance contract or law. The insurance premium depends on the sum insured and gross... ... Wikipedia

Insurance Premium- See Premium insurance Dictionary of business terms. Akademik.ru. 2001 ... Dictionary of business terms

Insurance premium- (insurance premium) payment for insurance, which the policyholder (beneficiary) is obliged to pay to the insurer in the manner and within the time limits established by the insurance contract. Remuneration paid by the policyholder to the insurer for accepting... ... Economic and mathematical dictionary

Insurance premium- (English insurance premium) payment for insurance, which the policyholder (beneficiary) is obliged to pay to the insurer in the manner and within the time limits established by the insurance contract. Insurer at... Encyclopedia of Law

INSURANCE PREMIUM- the next cash contribution of the policyholder to the insurance company in accordance with the insurance contract or law, insurance payment; its size is determined by the total amount of contributions required to pay the claims of policyholders, as well as... ... Legal encyclopedia

insurance premium- contributions made by the policyholder to the insurer by virtue of the insurance contract concluded between them; the amount of these contributions is established in the amount determined by the probable loss of a certain amount of these property benefits during the period... ... Reference commercial dictionary

INSURANCE PREMIUM- In insurance operations: 1. Assessment of insurance protection for an identified risk provided for a certain period of time; the price of insurance protection against a specific risk or group of risks specified in the insurance policy, provided for... ... Insurance and risk management. Terminological dictionary

Insurance premium- a remuneration paid by the insured to the insurer for the latter’s acceptance of the obligation to compensate the insured or assignee under the policy, within specified limits, for the amount of possible losses caused by perils covered... ... Librarian's terminological dictionary on socio-economic topics

Insurance premium- 1. The insurance premium is understood as the payment for insurance that the policyholder (beneficiary) is obliged to pay to the insurer in the manner and within the time limits established by the insurance contract...

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the amount of insurance premiums calculated based on
gross rates and
the amount of the insured amount.

View value Gross premium in other dictionaries

Gross- adv. Italian trade: weight of goods with closure and containers.
Dahl's Explanatory Dictionary

Gross- in meaning unchanged adj. (Italian brutto, lit. shapeless, ugly) (special). Together with packaging (about the weight of the goods); opposite net. Gross price.
Ushakov's Explanatory Dictionary

Prize- and. lat. an established reward, in money or things, for excellence in science, art, industry; honorary award. | Add-on to lottery winnings; free delivery........
Dahl's Explanatory Dictionary

Gross Adj. Unism.— 1. General, together with packaging (about the weight of the goods) (opposite: net).
Explanatory Dictionary by Efremova

Prize J.— 1. Monetary or other material incentive as a reward for smth. // Additional remuneration to wages for exceeding production standards, reducing costs........
Explanatory Dictionary by Efremova

Gross- unchangeable; in zn. adj. and adv. [from Italian brutto - rude] Special. General, together with packaging (about weight, mass of goods; cf. net). Weight b. five kilograms.
◁ Gross, unchangeable; Wed Weight together.......
Kuznetsov's Explanatory Dictionary

Prize- awards, w. (Latin paemium - Reward). 1. Award for distinction, merit in some kind. areas of activity. worker for a successful invention. Nobel Prize. 2. Special Reward........
Ushakov's Explanatory Dictionary

Prize- -And; and. [from lat. praemium - reward]
1. A reward (monetary, in the form of a valuable item, etc.) for success, merit in some way. areas of activity. International Peace Prizes. State laureate........
Kuznetsov's Explanatory Dictionary

Exchange Premium— - a pre-agreed penalty that, in a forward transaction, the buyer of a share pays to the seller if he refuses the transaction on the settlement day. When doing your.........
Legal dictionary

Gross- (from Italian brutto - rough, unclean) - 1) the mass of the goods together with containers and packaging; if the mass of the outer packaging (container) is subtracted from the mass of B., the remaining part is called semi-gross;........
Legal dictionary

Gross Share
Legal dictionary

Gross For Net— - a symbol for setting prices and making calculations based on gross weight, if the exact net weight is not important or its verification is impractical (for example, tare price........
Legal dictionary

Gross rent— - a rental agreement in which the lessor pays all ongoing maintenance costs of his property.
Legal dictionary

Gross share— - the total amount of insurance accepted by the insurer for the risk, including the actual retention and amounts subject to reinsurance.
Legal dictionary

Gross income— - income from investments in securities or real estate before any deductions, including taxes.
Legal dictionary

Gross cash flow- - the difference between cash receipts and payments of a company for a certain period.
Legal dictionary

Gross premium— - the amount of insurance premiums, calculated based on the gross rate and the amount of the insured amount.
Legal dictionary

Gross profit— - sales cost minus production costs, calculated before taxes.
Legal dictionary

Gross sales— - total sales value of the company.
Legal dictionary

Gross interest— - interest payments before deduction of taxes levied at the source of income.
Legal dictionary

Gross register tonnage— - volume of the ship's premises, expressed in register tons. One gross registered ton is equal to 100 cubic meters. lbs or 2.83 cu. m.
Legal dictionary

Gross rate— - tariff rate of contributions (payments) for insurance. B.-s. is the sum of the net rate and load, used, for example, to reimburse the costs of insurance........
Legal dictionary

Gross effect of Taxation— - costs equal to the sum of the net reduction in production benefits and the net reduction in consumer benefits that arise as a result of the created......
Legal dictionary

Currency Premium— - positive difference between the formal and current exchange rates.
Legal dictionary

Gross weight— - weight of the goods including containers and packaging. The term "semi-gross" is used, meaning the gross weight minus the weight of the outer packaging.
Legal dictionary

Export Award— - a financial benefit that is provided by the state to organizations and exporting firms in order to encourage exports. See t.zh. EXPORT PRIZE; EXPORT SUBSIDY.
Legal dictionary

Redemption Premium- - the excess of the price at which the loan or securities are returned by the borrower over the original price or face value.
Legal dictionary

State Prize— - 1) in the USSR, prizes are awarded annually in the field of science and technology, literature and art, architecture, for success in work (in 1940-1952 - Stalin Prizes, since 1966 - State Prize of the USSR)... ......
Legal dictionary

Additional Bonus— - additional insurance premium paid by the policyholder for the inclusion of additional risks in the previously agreed insurance conditions. In some cases, from the conditions........
Legal dictionary

Box Office Award— - bonus paid in cash; additional dividend paid in cash.
Legal dictionary

Gross premium is the total amount of the insurance premium that the policyholder pays to the insurer under the insurance agreement. In other words, it is the sum of all premiums associated with insurance. It is calculated taking into account the costs of concluding an agreement, supporting the case, the insurance itself and its extension.

What elements does it consist of?

The gross rate is the basis for calculation. Its components are the net rate and load. A net rate is used to establish the basic insurance fund intended to pay claims. Its size is directly dependent on the likelihood of possible damage to the insurance object. If the insurance contract provides for several forms of liability for the insurer, then the total net rate may consist of several parts.

Typically, the load on the net rate is the smallest element of the gross rate. But often its size becomes quite impressive for specific forms of insurance contracts. It includes such types of expenses that differ in their purpose, such as deductions for the maintenance of the insurance business and management, the profit of the insurer, and the costs of preventive measures. The costs of running an insurance business are expressed in the cost of insurance operations and are divided into the following types:

Costs for concluding and renewing insurance contracts, namely:
- payment of remuneration to agents, most often in the form of a commission;
- wages for employees drawing up contracts;
- costs of maintaining call centers;
- advertising and marketing expenses.
Payments for electricity, heating, water, postal and telephone costs;
Rental payments for premises;
Payments to posted workers;
Other expenses of the organization related to the implementation of activities.

Correct calculation of the net rate guarantees a stable financial position of the insurance company. The possibility of a risk event occurring is calculated based on an analysis of past events and the frequency of their occurrence. So, if out of 100 residential buildings of the same value over a certain period, 5 are destroyed, then the coefficient of the probable occurrence of such an event will be equal to 5%. This means that in order to correctly form an insurance fund for compensation of losses, the company needs to set a net tariff rate of 5% of the total insured amount.

How is the calculation carried out?

Example of gross premium calculation

The insurance organization provides insurance for citizens against accidents. Using special calculations, it was found that the average insurance amount is 300,000 rubles, security is 200,000 rubles, the average range of compensation is 55,000 rubles, the guaranteed safety coefficient is 0.98, the number of concluded contracts is 5,000, the number of risk situations in there are 400 of them, the share of load to the net rate is 25%. It is necessary to calculate the gross premium and its components. The probability of an insurance situation occurring is calculated using the formula:

where is the probability indicator; - number of cases; - the total number of contracts. That is, the probability indicator is 400 / 5000 = 0.08. The main part of the net bet is calculated using the formula:

where is the base part; - average support; - average value of the sum insured; - risk probability coefficient. That is, the base part is equal to 200,000 / 300,000 x 0.08 x 100% = 5.36 rubles. The size of the guaranteed premium to the net rate is calculated using the formula:

where is the guaranteed risk premium; - basic part of the net rate; - indicator of the probability of risk occurrence; - safety guarantee factor; - total number of contracts. After substituting the available data into the formula, it turns out that the guaranteed risk premium is equal to 0.1. The total net rate is determined by the formula:

where is the total net rate, and the remaining arguments are known. Thus, the net rate is 5.36 + 0.1 = 5.46 rubles. The gross rate is calculated as follows:

where is the gross rate; - interest load. That is, the gross rate is (100 x 5.46) / (100 - 25) = 7.28%. Having all the data, you can calculate the gross premium:

where is the gross premium; - maximum amount of insurance coverage; - gross rate. Then the gross premium will be equal to 300,000 x 7.28% = 21,840 rubles.

Calculations have shown that the cost of accident insurance for citizens should not exceed 21,840 rubles. The client package may include services such as insurance protection against disability, injury, and death. It is possible to fix the price of the specified package for a period of up to 1 year. This measure helps improve the quality of insurance coverage, the availability of medicine and medical care for injuries (particular emphasis on sports injuries), reducing the number of relapses, improving treatment results under conditions of regular monitoring, and so on.

Conclusion

Thus, the gross premium is the final amount of the premium that is paid to the insurer under the insurance contract and takes into account all components of the price of the insurance service. Most often, to calculate the premium, you need to know statistical data for the previous period, since the main components of the formula are indicators such as net premium and load.

Gross premium

The final amount of the premium, which is paid to the insurer under the insurance contract and takes into account all components of the price of the insurance service, is called in domestic practice gross premium (Fig. 5.2). It consists of the net premium and the load.

The net premium, which goes towards the formation of an insurance fund for subsequent payments, makes up the bulk of the gross premium (usually 70-85%). The calculation is carried out using actuarial methods based on statistical data for past periods.

The load intended to cover various types of overhead costs is about 15-30% of the gross premium, but can reach 40% if the conclusion of insurance contracts is associated with high costs.

In calculations, the load value is specified by an indicator that characterizes the total share of the load in the gross premium f :

This indicator is expressed as a percentage or fraction of a unit and is determined on the basis of an economic assessment of administrative and business expenses and the amount of commission to intermediaries. The first expenses are of a company-wide nature, and when calculating premiums, they are approximately divided between all insurance contracts in proportion to the amount of the premium.

Rice. 5.2.

Their share f DHR can be calculated based on accounting data for the previous period as the ratio of the amount of administrative and business expenses to the total volume of premiums for the same period. The commission is initially determined as a percentage of contributions. This percentage constitutes the share of acquisition costs in the gross premium f commission Planned profit f profit by type of insurance (if it is provided for in the price structure) is also often immediately set as a percentage of the volume of premiums. Thus, the total share of the load in the gross rate is obtained by adding all the indicated components:

If the share of the load in the gross premium is known f , then its absolute value for an arbitrary insurance contract is

From here we get the basic formula for calculating the gross premium:

Insurance rate

The risk premium underlying the insurance price corresponds to the expected loss under the contract, which, in turn, is largely determined by the amount insured. Indeed, in property insurance, the higher the value of the object and the insured amount, the more you will have to pay in case of severe damage or complete destruction. In personal insurance, where in case of an insured event payment of the full insured amount is provided, this relationship is even clearer. Therefore, it has become customary in insurance to set fees in proportion to the amount of the insured amount.

The coefficient connecting the premium and the insured amount is called insurance rate. Most often it is expressed as a percentage of the sum insured.

The use of a relative coefficient instead of the absolute value of the insurance premium made it possible to simplify the procedure for determining the price when concluding a contract. The insured amounts can be any, and for each value it would be necessary to calculate its own premium amount. But for similar objects that have the same degree of risk, but different insurance amounts, you can use the same tariff. The amount of the premium is obtained by simply multiplying the sum insured by the tariff:

Example. Insurance rate and insurance premium

In the previous examples, approaches to calculating the insurance premium for a portfolio consisting of objects of the same risk level and value were considered. The insured amount for all contracts was 500,000 rubles. The insurance fee, taking into account the risk premium, was set at 21,000 rubles.

But in real life, the cost of cars of even the same make and year of manufacture may differ due to different configurations, technical condition, etc. It would be unfair to demand from the owner of a car that costs 450,000 rubles the same bonus as from the owner of a car that costs 550,000 rubles. It is very labor-intensive to calculate the risk premium, risk premium, net and gross premiums for all possible values of insurance amounts.

If the probability of theft (i.e., the degree of risk) is the same for all objects, then it is more convenient to establish a relative coefficient that determines the cost of insurance depending on the amount of the insured amount, taking into account this degree of risk. This coefficient is called the insurance rate.

In our example, the fee for car insurance worth RUB 500,000. is 21,000 rubles, i.e. 4.2% of the sum insured. This is the insurance premium rate or insurance tariff. Now, if you need to insure a car worth 450,000 rubles, to determine the amount of the premium, just multiply this amount by the tariff:

450,000 x 4.2% = 18,900 rub.

550,000 x 4.2% = 23,100 rub.

As a result of this approach, the price of insurance remains fair for all participants, since those whose cars are more expensive and those who claim more compensation in the event of theft pay more.

It should be emphasized that the same tariff can only be applied to objects with the same degree of risk, and that, in turn, may depend on the amount of the insured amount. For example, if within a given group it is necessary to insure a more prestigious car worth 1,000,000 rubles, for which the likelihood of theft is higher, then the pricing of such a contract must be carried out separately. The premium calculated on the basis of a 4.2% tariff, although high, will not be equivalent to the real degree of risk that the car poses to the insurance fund. In addition, the emergence of one object that is significantly different in value from the rest can seriously disrupt the homogeneity of the portfolio and require additional measures to be taken to maintain stability (increasing the risk premium, reinsurance, etc.).

Insurance rate- the insurance premium rate per unit of sum insured, taking into account the object of insurance and the nature of the insurance risk (clause 2 of Article 11 of the Law on the Organization of Insurance Business).

However, in practice, the tariff is often called not only the relative rate per unit of insurance amount, but also the amount of premium in monetary terms for a certain “unit” of insurance (from one object, per day, etc.). For example, in insurance of citizens leaving their place of permanent residence, the insurance tariff is often referred to as the amount of premium per person for one day of travel. In this case, the full premium under the contract is obtained by multiplying this “tariff” by the number of days of insurance. In voluntary health insurance, the tariff can be called the insurance premium for one person for a year. Even in Decree of the Government of the Russian Federation of December 8, 2005 No. 739, which determines the procedure for calculating premiums for compulsory motor liability insurance, basic insurance rates are given both as a percentage of the insured amount and in absolute terms in rubles.

Since the tariff determines the amount of the insurance premium, it is calculated taking into account the object of insurance (including its cost) and the nature of the insurance risk, as well as the level of administrative and business expenses of the insurer and costs associated with concluding contracts.

In Russia, tariffs for voluntary types of insurance are determined by each insurer independently. At the same time, their value and calculation procedure are controlled by state insurance supervisory authorities. In compulsory insurance, tariffs are set in accordance with federal laws governing these types.

The insurance rate has the same structure as the insurance premium. The tariff that determines the amount of the gross premium is called gross tariff, or gross rate. The gross rate consists of the net rate (net tariff) and the load. Net tariff determines the amount of the net premium and consists of the main part of the net rate, the corresponding risk premium, and the risk premium. in the tariff is set by the same relative indicator f , which shows the share of load in the gross tariff.

Due to the fact that the structure of the tariff and premium is the same, the formula for calculating the gross rate has an already familiar form.

Insurance as an institution of financial protection involves transferring to the insurer the responsibility of the insured to bear the risk. A sign of the transfer of such responsibility is the payment of an insurance premium (gross premium, insurance premium), one of the structural elements of which (net premium) is intended for future insurance payments.

The gross premium, or insurance premium, is the amount of insurance payments under an insurance contract, paid by the policyholder to the insurer (insurance organization) for a certain period from the entire sum insured.
The size of the gross premium depends on the amount of the sum insured, the level of risk and the period for which the insurance premium is made. The gross premium structure reflects the economic mechanism of insurance.
Two elements can be distinguished in it - a net premium intended for insurance payments under the terms of the insurance contract, and a load intended to cover the costs of running a business and making a profit from insurance operations (see Fig. 3.4). Note that the net premium calculated per unit of insurance amount, usually equal to 100 rubles, is called the net rate or insurance tariff.
GROSS PRIZE
LOAD Designed to cover the costs of running a business and obtaining planned profits from insurance operations

Note!
The gross premium structure contains two elements - net premium and load.
The ratio of net premium to load may vary and depends on the type and volume of insurance, as well as on the level of business costs. Currently, the share of net premiums for various types of insurance fluctuates between 70-85%.
The special significance of the structural element of the gross premium, intended for the formation of a reserve of precautionary (preventive) measures, determines another option for the structure of the gross premium (see Fig. 3.5).
GROSS PRIZE

Rice.

3.5. Gross premium structure highlighting the preventive action reserve

In general, the net premium may include the following structural elements: risk contribution, risk (guarantee) premium and savings (savings) contribution (see Fig. 3.6).
NET PREMIUM

Rice. 3.6. Possible net premium structure
The risk premium is intended to cover the risk of all types of insurance, i.e. it is used for insurance payments upon the occurrence of an insured event. It is always present in the net premium structure.
The accumulative (savings) contribution is intended to accumulate the amount paid under the terms of a long-term life insurance contract if the insured survives to a certain date (according to the risk of survival). The savings contribution must be invested in order to generate income. It is a structural element of the net premium of long-term life insurance contracts, for example, in mixed life insurance and pension insurance.
The risk (guarantee, or stabilization) premium is intended to compensate for the possible excess of actual payments over the calculated ones, taken into account in the form of a risk contribution. The net premium may not be included in the structure - this depends on the management strategy chosen by the insurer. If he has set himself the goal of conquering the insurance market due to prices lower than those of other insurers, this element (risk premium) is not included in the net premium structure. If the insurer wants to strengthen its financial stability, this element is included in the net premium.
Note! --- -
In the structure of the net premium for risky types of insurance, there is always a risk contribution and there may be a risk (guarantee) premium.
The amount of the risk contribution to the net premium depends on the amount insured and the probability of the occurrence of an insured event.

The size of the risk premium included in the structure of the insurance premium depends on the accepted probability of actual payments exceeding the calculated ones. The lower the specified probability of actual payments exceeding the calculated ones, the higher the size of the risk premium. The relationship between the risk premium and the risk premium for different types of insurance may be different.
Attention policyholder! ^
Payment of the insurance premium means the possibility of receiving insurance payments.
The fulfillment of the insurer's obligations to the policyholders for insurance payments is based on compliance with the principle of pooling economic risk, according to which everything collected from policyholders to fulfill insurance obligations is accumulated in insurance funds. The sources of various insurance funds intended for payments under the terms of the insurance contract are the elements of the etto premium - risk premium, risk premium and savings contribution.
As already noted, the load represents the part of the gross premium intended to cover the costs of running the business and to generate profit from insurance operations (see Fig. 3.7).
The first structural element of the burden - the cost of running a business - relates to the cost of insurance services; the second element is the planned profit of the insurance organization from insurance operations.

Traditional, Specific
typical for insurance,
for any type including:
activities, commission fees, for conducting an examination, issuing a policy, etc.

The costs of running a business are divided into traditional, which occur in any type of business, and specific, characteristic of the insurance business. Specific types of costs include commissions to agents and brokers for intermediary activities in the distribution of insurance products, costs associated, for example, with conducting an initial examination (at the conclusion of a contract), as well as examination carried out upon the occurrence of an insured event, etc.
Note!
The costs of carrying out precautionary (preventive) measures can be:
a) are allocated separately in the gross premium structure - in this case they are not included in the specific costs of running the business;
b) are not allocated separately in the structure of gross premiums - in this case they are included in the specific costs of running the business.
The experience of economically developed countries shows that the share of costs for carrying out preventive measures can be 4-6% of the gross premium, and the share of commissions can reach up to 20% of the gross premium.
The structure of the insurance premium (insurance premium) reflects the intended use of its individual parts.
Note!
The structure of the insurance premium reflects the intended purpose of each of its elements and is associated with the financial structure of the insurance organization.