Insurance object
Insurance object, that is, the object of the insurance contract, is not the subject matter of the insurance itself, but the insurable interest of the policyholder or the insured in the subject matter of the insurance (biāodì).
Insurable interest, is the policyholder or insured of the insurance subject matter of the legally recognized interests. This is mainly because the insurance contract protects not the safety of the subject matter of the insurance itself, but the economic interests of the policyholder or the insured, the beneficiary of the damage to the subject matter of the insurance. The subject matter of insurance is only the carrier of insurable interest.
The subject matter of insurance
The subject matter of insurance is the object of insurance, the subject matter of personal insurance is the body and life of the insured, and the broad property insurance is the property and its related economic interests and liability for damages as the subject matter of insurance, of which, the subject matter of the property damage insurance is the insured property, the subject matter of the liability insurance is the insured person is subject to the economic liability, credit insurance is the subject of the insured's credit caused by economic losses.
Premium Rate
The premium rate is the ratio of the premium to the insured amount, which is also known as the price of insurance. It is usually expressed in terms of premiums payable per hundred or thousand dollars of coverage.
Insurers use insurance actuarial calculations to quantify risk. Insurers estimate future losses (predetermined loss ratios) through the compilation of data, usually using reasonable approximations. Actuarial calculations use statistics and probability to fit and analyze the distribution of risk, and insurers apply this scientific principle with certain conditions to set premium rates.
These conditions include a predetermined rate of return on investments, a predetermined rate of interest on insurance policies, predetermined operating expenses and taxes, and, in the case of life insurance companies, a predetermined mortality rate.
The predetermined interest rate that the insurer must pay will be compared to the market rate for borrowing, and many insurers don't outperform the predetermined interest rate, but they prefer to keep it lower than they would if they borrowed from elsewhere. If they don't, the insurance company won't give a return on the owner's capital, and then they will borrow money elsewhere to get a market-rate return on their investment.