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Once the claims fund is established, the insurer will also need to cover the day to day running costs of the business (such as salaries, accommodation, telephones, data processing and advertising). »Ê¹ÚÌåÓýappse costs are passed on to the customer in the premium. ‘Costs of administrationâ€� are therefore a fundamental part of the premium in that they represent part of the consideration for the insurer’s supply of insurance.