ABSTRACT
Risk costing (Chapters 6-18) is an essential component of pricing, but there are a few other elements that we need to consider before we translate this into the actual premium charged to policyholders (Figure 19.1). For one thing, we need to include loadings for expenses, commissions, reinsurance, target profit, and the like – allowing us to produce a ‘technical premium’, that is, the premium that should be charged on a purely technical basis, without taking into account competitive pressure and other commercial considerations (Sections 19.1 and 19.2).
