Chapter 17 · Day 17 — Life and non-life insurance
Life insurance
Premiums now, claims much later, and an investment portfolio in between. The life fund is the heart of it.
19 of 30 · 12 min
An insurer collects premiums before it pays claims. The money held in between is invested, and the return on it is a large part of the profit.
How an insurer actually earns
| Metric | Reads |
|---|---|
| First-year premium | New business written |
| Renewal premium | Whether policyholders stay |
| Life fund and its growth | The accumulated pool backing future claims |
| Persistency ratio | Share of policies still paying — quality of the book |
| Claim settlement ratio | Share of claims actually paid |
| Solvency ratio | Capital against regulatory requirement |
| Investment yield | Return earned on the fund |
| Management expense ratio | Cost discipline |
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