Acquisition Cost

Acquisition Cost Acquisition cost refers to the expenses an insurance company incurs to secure a new policy from a customer. These costs can involve a variety of activities and resources, and their impact on the company's profitability is significant. Acquisition costs mainly comprises Commissions: Payments made to agents or brokers for selling insurance policies. Marketing and advertising: Costs associated with promoting insurance products through various channels. Underwriting expenses: Costs of assessing and evaluating risks associated with potential policyholders. Policy issuance: Administrative costs associated with issuing and processing new policies. Technology and infrastructure: Costs of maintaining technology systems and resources required for sales and policy management. Understanding acquisition costs is crucial for both insurance companies and policyholders. Companies need to manage these costs effectively to remain competitive and profitable, while customers should be aware of how these costs contribute to their insurance premiums #benewinsurance #insurtech #inclusiveinsurance #insurance #reinsurance #takaful