WHY SHOULD PREMIUM BE SUFFICIENT

 Insurers must see that they have sufficient resources to be able to meet their liabilities

 To make sure they have enough capital and that their risks are not heavy.

 They must also see that their premiums are set at the correct rate so as to comfortably cover any potential losses. -compensation

 Provide safety and security – insurance provide financial support and reduce uncertainties in business and human life of sufficient premiums

 Generate financial resources –insurance generate funds by collecting premium. These funds are used in industrial development in generating more fund. This fund are invested in government securities and stock

 To promote economic growth - when the insurance premium are sufficient, the insurance generate significant on economy through domestic savings domestication. The premium are used in accumulation of capital into productive investments.

 Enable the spread of risks – insurance facilitates spreading of risks by use of premiums from the insured to the insurer. The risks are spread to a large number of people who pay premium to the insurer 

 Enhances compensation out of the funds of the insurer for the individuals whose loss has occurred 

 Source of the collecting funds are collected by the way the premium that are used for industrial development which accelerate the economic growth