An insurance company makes a profit by taking in more in premiums than it pays out to cover customer losses.

Question

Quizplus · Accepted Answer

This is the basic principle behind how insurance companies operate. They collect premiums from their customers and use that money to cover the costs of any claims or losses. If their premiums exceed their payouts, they make a profit. However, if their losses exceed their premiums, they may experience a financial loss.

An Insurance Company Makes a Profit by Taking in More