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Question

Could you clarify please whether it is correct to assume that administrative expenses might be considered as a proxy to variable costs and overhead expenses as fixed costs?
Or do you have some other methodology which could help to assesses how should the overhead expenses be allocated?

European Insurance and Occupational Pensions Authority · Accepted Answer

Overhead expenses include salaries to general managers, auditing costs and regular day–to–day costs i.e. electricity bill, rent for accommodations, IT costs.
These overhead expenses also include expenses related to the development of new insurance and reinsurance business, advertising insurance products, improvement of the internal processes such as investment in system required to support insurance and reinsurance business (e.g. buying new IT system and developing new software)."
According to this definition we would agree that as a proxy this corresponds to the fixed costs.

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