Question

how do insurance companies calculate the premium amount?
a. by the total number of policyholders they have
b. using probability and risk assessment of the insured item or person
c. based on the age of the policyholder only
d. from the number of claims the company received in a year

Explanation:

Insurance companies calculate premiums using probability and risk assessment. This considers factors like the likelihood of a claim (for an item or person). The total number of policyholders (a) doesn't directly calculate an individual's premium. Age (c) is just one factor, not the only one. The number of claims a company received (d) is a past metric and not the method for calculating current premiums for new or existing policies.

Answer:

B. Using probability and risk assessment of the insured item or person