Building Blocks of an Insurance Premium A. The actual Cost of the losses B. The Expenses of Operating and Maintaining the Insurance pool C. An Allowance for Unexpected Losses or the risk Factor for the Insurance pool D. Earnings on Investment An Insurance premium=A+B+C-D Sometimes an insurance premium can be priced below the level of expected losses▪Building Blocks of an Insurance Premium A. The Actual Cost of the Losses B. The Expenses of Operating and Maintaining the Insurance Pool C. An Allowance for Unexpected Losses, or the Risk Factor for the Insurance Pool D. Earnings on Investment An Insurance Premium=A+B+C-D Sometimes an insurance premium can be priced below the level of expected losses