Posted: Tue Sep 11, 2007 1:42 am Post subject: Difference revenue and premium?
Hi, I would like to know for an insurance company, what is the difference between the revenue and the premium.
Premium depends on the turnover of the insured, and the revenue is like a commission that the broker earn, is that right?
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Posted: Tue Sep 11, 2007 7:10 am Post subject: Revenue of an insurance firm........
Hi there………as far my knowledge goes………revenue is the return that the insurance company earns from the investment of the accumulated premium in different stocks and bonds.
Premium earned+ return earned form the investment- (claims paid + other operational costs) computes the profit earning of an insurance firm. If the resultant amount is greater than zero, then the firm is making profit form the business. But if it is otherwise, i.e. total cost is more than total revenue earned, then the company is making loss and will soon be out of business.
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Premium can be termed as the cost of insurance. This is the amount you pay every month to the insurance company in order to keep the policies at place. If the insured fails to pay his/her premium on time, the insurance firm will discontinue his/her coverage. However, your premium amount depends on many factors, like- age, type of risk, type of coverage, rider, covered perils; so on and so forth. The premium rate also depends upon the insurance company. Different companies can charge different amount even for the same covered perils. Cyrus _________________ I am and always will be a sinner. But that's the beautiful thing about Jesus. I'll always try to be a better person in the eyes of God. But I'm not all of a sudden stepping up on a pedestal and saying I'm holier than thou, 'cause I'm not!
In any business revenue refers to the total turnover of the company. It is same in case of the insurance firms. As someone has already mentioned revenue is the sum-total of the total premium earned in a business year and return earned from any investment. The insurance agents earn the brokerage fee for selling the insurance policies of the company. It may or may not be a part of the revenue earning. I believe, most of the companies will count it as the cost. But the companies give out a part of their revenue earning to their customers.
Posted: Thu Sep 13, 2007 9:17 am Post subject: Premium
Insurance company earnes revenue in two ways one is Premium income which it earns by undetaking the risk and the other one is investment income which it earns through investments made. _________________ Register Now to have your Insurance queries solved.
