The expense load is an amount the insurer adds to an insurance premium to cover business expenses and the contingencies, including cost of capital, shown mathematically as follows.
The expense load is an amount the insurer adds to an insurance premium to cover business expenses and the contingencies, including cost of capital, shown mathematically as follows.
Premium = Claims + Expenses + Profit loading.
Profit loading is usually expressed in factor "times" or "percentage" of expected claims and business expenses or shown mathematically as the following.