Pricing Vs Valuation

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Tgemnani
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Joined: 21 Jul 2018, 21:37
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12 Jan 2019, 23:41

What is the basic difference between Pricing and Valuation ?

Basically, pricing means that the price should be charge for a particular policy after estimating and ascertaining all costs related to that product. Another way of saying that the, pricing is the Pure premium set by the insurance company for the given product.

The "Pure Premium" refers to that portion of that rate needed to pay losses and loss adjustment expenses. The loading refers to the amount of the premium necessary to cover other, expenses particularly sales expenses and to allow for a profit.

Valuation of product means that the amount which a company have to set aside after assessing the assets and liabilities as a reserve for a particular period or year for a group of policies. In a simpler manner, valuation is the how much money should set aside for a future claims?




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