Pricing of insurance products is not an easy task. It is made more difficult by the intangible nature of insurance products. Ratemaking is interplay of various forces and not all of them pertain to the realms of economics. The pricing process factors in the risks of loss, mortality, regulatory guidelines, business expenses as well as dynamics of markets-national as well as international. This article intends to explore the entire gamut of issues involved in computation of insurance premium -both in life and non-life sector.
