The cost of insurance services is expressed in the amount ofinsurance premium (contribution). The premium is the price for the services of the insurer, which he undertakes to provide in case of occurrence of the events prescribed in the contract. It is based on the tariff rate (or tariff).
The insurance rate is the rate of the insurance premium expressed in rubles, which is paid from the unit of the insured amount.
The premium should be such that it can cover the possible claims of the insured, create reserves and cover the costs of the company to conduct business, as well as ensure profit.
The price of insurance services depends on the demand for it and the interest on bank deposits. It is also affected by the structure of the insurance portfolio (set of risks) and management costs.
If the insurance rates are set inlegislative (centrally), the rate of voluntary insurance can be calculated by the insurer, while it significantly affects the financial stability of the implementation of insurance operations.
Tariffs are calculated with the help of statistical andmathematical methods, which are usually called actuarial calculations. They allow to determine the share of the insured in the total insurance fund. Choose a method, based on insurance risk, timing, nature of payments and bonuses.
The full insurance rate is usually called"Gross rate". It consists of a net rate and a load. The net rate includes a risk rate (insurance fund) and a risk premium (reserve fund). The load consists of the costs of running the business (profit) and the reserve of preventive measures.
Net rate is the part of the tariff thatis directed to the formation of reserves for further payments in the event of insured events. Due to the risk rate included in it, reserves for insurance payments are formed. A reserve fund created at the expense of a risk premium is necessary in circumstances of the actual excess of the number of settlement cases of payments.
The load is the part of the amount that is included in the insurance rate to cover the costs of doing business, generating profits and creating an insurer's warning fund.
Insurance is carried out either in individual or in collective form. In the latter case, the premium is calculated using a simplified scheme based on the averaged data.
The insurance rate for risk types (other than life insurance) is calculated based on statistics or other information on a particular type of insurance.
In a life-saving life insurance, a net rateThe tariff is determined differently, based on the tables. The gross rate includes the base part (net-rate) and the load to it, which covers the costs of doing business. The net rate also consists of two parts - a funded contribution and a risk rate (a contribution in case of death).
Insurance tariffs for OSAGO are establishedcentralized by the government of the Russian Federation, that is, they are the same for all insurance companies. This means that, knowing the current rates of OSAGO, you can independently calculate the cost of a policy for a specific insurance contract. It should be borne in mind that, in addition to tariffs, the cost of the policy is affected by many other factors, such as the age of the driver; driving experience; the number admitted to the management of persons; region; vehicle characteristics, etc. Tariffs in this type of insurance differ depending on whether there were any accidents in the history of driving. Thus, the MTPL formula includes the base tariff multiplied by various correction factors.
Tariff policy of insurance companies is basedon the following principles. This is the principle of ensuring the self-sufficiency of operations and their profitability, the equivalence of insurance relations between all parties to contracts, the availability of tariffs for all comers and their stability for a long time.