Final answer:
The question is about the ratio between company losses and company revenue in insurance companies.
Step-by-step explanation:
The subject of this question relates to Business and the topic of insurance. Specifically, the question is asking about the ratio between company losses and company revenue that determines an insurance company's revenues needed to cover annual claims by its policyowners.
When determining insurance company revenues, several factors need to be considered, including the average person's claims, the costs of running the company, and leaving room for the firm's profits. It is important for the average person's payments into insurance over time to cover these aspects.
Furthermore, insurance companies must also take into account risk groups, which are groups that share similar risks of adverse events occurring. Some individuals may face higher risks based on genetics, personal habits, or geographical factors. This understanding helps insurance companies calculate premiums and manage risks.