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The Business of Insurance


The Business of Insurance

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    Available in PDF Format | The Business of Insurance.pdf | Unknown
    Howard Potter Dunham
Excerpt from book: Chapteb XXXHI PREMIUM BATES By Edson S. Lott Pbemium rates for accident insurance are probably the least scientific of all insurance rates. Because of that fact, the reasons underlying their construction are hard to formulate and present. They are more the result of actual year-to-year experience under the guidance of the general law of average, than of mathematical calculations based upon a mass of statistical information previously acquired. This is not saying that the scientific method is wholly absent: it is not an admission that accident insurance is completely devoid of the scientific element: but it would be extremely difficult, if not impossible, for any one to reduce an accident rate to its component parts, and to furnish satisfactory reasons for the existence of each part. In this particular the manner of construction of these rates is not comparable with that of those made for fire insurance which, with the exception of the arbitrary " basis rate," are made up from a schedule on the one side of charges for hazards and on the other of credits for their amelioration. The balance between these constitutes the rate. Such a bill of particulars can be understood by any one and, assuming that the items composing it have their origin in actual fact, are convincing. This process of segregation of hazards cannot yet be undertaken in accident insurance for the purpose of demonstrating how its premium charges are determined. As a matter of fact, the rating in this business seems to revolve around a unit or standard composed of a certain kind of policy contract upon which a premium of $25 a year has been placed—the benefits and privileges decreasing with a lower premium, and increasing with ahigher one. This feature of the subject will he more fully discussed later on. I...  
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Book details

  • PDF | 376 pages
  • Howard Potter Dunham
  • General Books LLC
  • Unknown
  • 4
  • Other
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