When making the product price, the insurance company will comprehensively determine the product price according to three conditions: the predicted mortality rate, the required cost and the future investment income of the insurance premium. After the products are sold, they should be compensated according to the contract. Assuming that the expected death rate is five per thousand, but the actual situation is better, only four per thousand people die, then there is a difference between death and benefit. Suppose the booking fee is 100 yuan, but by improving the process and improving the per capita performance, it only costs 90 yuan, so there is a difference of 10 yuan. Suppose that the expected rate of return of insurance companies' investment with insurance premiums is 3.5% per year, but when the market is good, the rate of return on investment reaches 5%, then there will be a certain spread. The sum of these three parts is the profit composition of that year.
However, there are differences. Similarly, these three parts may also lose money.
If there is a profit, the CIRC stipulates that 70% of the distributable surplus in the current year will be returned to customers through dividends and other forms.
Further reading: How to buy insurance, which is good, and teach you how to avoid these "pits" of insurance.