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.
AI Data Centers Are on Track to Fuel ‘Explosive’ Growth in Captive Insurance 
Ford to Recall About 223,500 Vehicles Over Fuel Tank Issues 
The Big Data/AI ‘Revolution’ Is Driving Up Verdicts, Settlements as Plaintiffs Buy In 
New York Contractor Charged with $160K Workers’ Comp Insurance Fraud From This Issue
