Insurance premiums are a significant operating cost for any business, irrespective of its location or industry. Unfortunately, the underwriting process isn’t as simple as an insurer pricing a risk to cover the potential loss for that business in the upcoming period. The insurer will also factor in the distribution cost, the cost of using their capital to insure the risk, including a margin for profit, as well as the overall performance of all their clients within the risk concerned. A fundamental principle of insurance being that the premiums of many cover the losses of the few.
