• Expense burden is the amount that an insurer adds to an insurance premium to cover business expenses and contingencies, including the cost of capital, mathematically shown as follows. Premium = Claims + Expenses + Earnings burden Earnings burden is usually expressed as a “multiple” or “percentage” of expected claims and business expenses, or expressed mathematically as follows. Target premium = (1+ r) X r = profit utilization factor, expressed as a percentage, X = sum of expected losses on claims and other business expenses - administrative expenses, commissions, overheads