Final answer:
An insurance company must ensure that collected premiums cover the average person's claims, administrative costs, and provide for the company's profits, all while considering the varying risk groups among policyholders to maintain actuarial fairness.
Step-by-step explanation:
When it comes to delivering claim obligations, an insurance company must maintain a delicate balance of several key factors. Firstly, the insurance premiums collected from customers over time must be sufficient to cover the average person’s claims. Secondly, premiums must also account for the administrative costs one incurs while running the company, which includes hiring workers, administering accounts, and processing claims. Lastly, these premiums should leave room for the insurance company's profits, which ensures the firm remains financially viable and can continue to serve its policyholders.
It is also important to acknowledge that not all policyholders face identical risks, and this needs to be considered when premiums are set and claims are managed, so the principle of actuarial fairness is maintained. The balancing act between these factors ensures that the insurance company can uphold its obligations to its customers while remaining a profitable entity.