Expense Loading

Last updated: May 14, 2018

What Does Expense Loading Mean?

Expense loading is the portion of an insurance premium that is meant to cover the insurance company's expenses, including taxes and underwriting costs. Alongside the likelihood of claims and profit loading, expense loading is considered when calculating premium offers.


Insuranceopedia Explains Expense Loading

Possible claims, profit loading, and operational expenses make up the cost of an insurance premium. Operational expenses include the salaries and wages of those who work for the insurance company, the utilities used by the company, and more.

Since a lot of companies sell the same insurance product, there is a struggle to lower the expense loading so that they can, in turn, lower premiums as well.


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