What is a Combined Ratio?

The ratio of addition of the incurred losses and operating expenses as part of the percentage of earned premium is known as the Combined Ratio. It measures the profitability of the insurance company to find out its performance in day to day operations.  It basically gauges the outflow of money from the insurance company as

What is the meaning of Annualized Premium?

The premium which is paid annually is called the annualised premium. Insurance policies come up with many options to pay a premium which can be paid monthly, quarterly, bi-annually or even annually. It is the choice of the insured person to pick any one option for the premium. E.g. if the monthly premium of any

What is the meaning of Adverse Selection?

Adverse selection is a situation where one party in a transaction has more information than the other. The information is generally highly useful about some aspect of the transaction like about the quality of the product. The asymmetry in information raises the probability of risk for the insurer as the risk is not included in

What are Actuaries?

An Actuary is a person who has expertise in the fields of economics, statistics and mathematics and helps in assessing risks and estimation of premiums for insurance firms. Advanced techniques, statistical and analytical skills are needed for evaluating risks and returns related to every proposal. They have a vital role in the operations and profitability

What is Annualized Premium Equivalent?

Annualized Premium Equivalent is a commonly used measure to determine the business sales in life insurance field. It is computed by the sum of regular annualised premium which came from new business and 10% of the first standalone premium over the same stated period. The premium so earned by the firms can be extended to