IPT05250 | Calculating the value of the premium: how the value of ‘any risk’ is determined
From HM Revenue & Customs · Insurance Premium Tax
To determine the value of ‘any risk’, the underwriter, using actuarial tables, other statistical information and their professional judgment, rates risks according to:
the amount for which the insurer is liable - usually expressed as the sum insured or a limit of liability;
the likely claims ratio (the possibility of loss occurring).