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Burning Cost Ratio
(redirected from Pure Loss Cost)

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Burning Cost Ratio
In insurance, the ratio of losses for which a reinsurer pays to the insurer's premium income. It is also called pure less cost.


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Underwriting expense includes costs to acquire business, such as administration, advertising, marketing, taxes, licenses, fees, agent commissions, policy issuance costs; and costs to ensure that the acquired business is rated accurately, such as data, systems, and administration costs--that is, all costs except pure loss cost and LAE.
For instance, when some risk managers speak of costs, they mean pure loss costs, while others may refer to total premiums.
7 percent in the pure loss cost factors to the California State Insurance Department, but we do not know whether or when this recommendation will be adopted.
 
 
 
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