Retro Premium =
Basic Premium includes insurer acquisition costs, insurer operating expenses and an allowance for profit for the insurer. Loss Conversion Factor is a claims handling fee included for the administrative cost the carrier assumes when handling the claims. The Loss Conversion Factor is usually a percentage of losses, normally 10 percent to 15 percent. Tax Multiplier reflects state premium taxes, licenses, fees and miscellaneous assessments that the insurer must pay on the premium it collects.
Was this article valuable?
Here are more articles you may enjoy.
Convicted Insurance Mogul Lindberg Should Pay $1.6B Restitution to Companies 
Hedge Fund Money Is Reshaping a 180-Year-Old Insurance Model 
Connecticut High Court: Injured Rental Car Occupants Covered for Uninsured Motorist 
Florida Mobile Home Insurance Market Still Struggling With Premiums, Coverage From This Issue
