Actuarially price is the amount that gives value equal to the price of the produ

Question

Actuarially price is the amount that gives value equal to the price of the product considering the probability of occurrence of the event. An insurance contract is actuarially fair if the premiums paid are equal to the expected value of the compensation received. This expected value is, in turn, defined as the probability of the insured-against event occurring multiplied by the compensation received in the event of a loss.

But this is not practically possible because if insurance companies pay out all that they a have received, what will happen to the overhead and administrative costs?

Explanation / Answer

How do I normally find the actuarially price?

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