Description: The purpose of this paper is to examine the various profit objectives used in the development of a new product for a stock life insurance company. From Product Development Section Monograph, M-AS99-3.

Description: This report explores ratemaking, examines the relationship of gross premiums and profit margins, suggests criteria for measuring contingency and profit margins, discusses the types of assumptions suitable for calculating nonparticipating rates and presents the mathematical technique to determine the premium. A discussion of the paper follows.