Sample Dissertation Format - Scor

The company’s profit requirement could be set as a required proportion of the net present
value (NPV) from the contract to the premium received under the contract. The risk discount
rate at which the company will calculate the NPV will also need to be chosen. The risk
discount rate will be set at the company’s investor’s expected rate of return.
Expenses and commission under the KNCU plan have been set at a flat 20% of the premium.
The scheme is not expected to make a profit as it is subsidized.
For the Philippines cash scheme, the expenses, commission and profit are as follows:
Table 4. Philippines Cash Plan Expenses, Commission and Profit Loading
Item % of Office Premium
Policy Tax 5%
Collection Fee 5%
Administration Charge 10%
Brokerage Charge 10%
Distributor Commission 5%
Underwriting Profit Loading 13%
Total 48%
Source: MicroEnsure PHP Cash Hospital Plan Model
Deriving assumptions for the HMIS involved cruder adjustments than would be made in
pricing conventional products. This is because the data available for the microinsurance
schemes were less directly applicable to the scheme than they would have been in a
conventional setting.
The result is assumptions with greater margins for uncertainty – so prudent assumptions
rather than best estimate are used. This leads to higher premiums that may not be
acceptable to the target population or the subsidising body. The next chapter describes the
pricing model that will utilise these assumptions.
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