The insurance cost benefit analysis is a process through which insurance companies are able to estimate and analyze the cost of the policy against the claims that need to be settled. This a method through which the company is able to gauge whether there is high loss ratio or low loss ratio for the company. The cost benefit analysis is required so that the company does not run into loss due to any policy claim. This also ensures the insurers that the policy will provide benefits as per the premiums and payments made.

The analysis provides stability for the company. It is necessary that the insurance company provides proper coverage and pricing for the coverage. High premiums can lead to lower number of beneficiaries and lower premiums can lead to losses within the company. Similarly, more benefits for lower costs are not beneficial for the company. Hence, the analysis is able to find a middling ground for the insurer and the company.

Sample Insurance Cost Benefit Analysis

Name of Insurance Company: TYRION INSURANCE CO.


Name of Insurance Policy: JOFFREY Dental Insurance

Name of Analyzer: Circe Clients Co.

Objectives:

  • To find out the optimum costs of the Dental insurance policies in the market and compare it to JOFFREY Dental Insurance
  • To find out the claims provided on an average by other insurance policies and compare it to afore mentioned policy.

Analysis Overview:

  • Cost of coverage: $45 per claim which amounts to a total of $234 claims per month. This is an average estimate and matches with JOFFREY Dental Insurance
  • The claims provided are similar to the private insurance policy coverage
  • The premium collected amount to $50 per month. This makes it profitable for the insurer and also provides stability to the company.  Premium differs according to the claims opted for,

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