What is a common cause of premium fluctuation in insurance?

A common cause of premium fluctuation in insurance is market demand shifts. When there are changes in the overall demand for insurance products, it can significantly impact the pricing and premiums. For instance, if there is a heightened awareness or concern about certain risks (such as natural disasters or health issues), more individuals may seek coverage, leading to increased demand. This elevated demand can enable insurers to raise their premiums. Conversely, if the demand decreases due to changes in consumer behavior or economic conditions, premiums might also decline as insurers compete for fewer customers.

In regard to the other choices, misclassification refers to incorrect categorization of risk, which can affect individual premiums but is not typically a broad cause of premium fluctuation across the market. Changes in company ownership can lead to strategic changes in pricing but are not a direct cause of premium fluctuation. The policyholder’s age can impact individual premiums—older individuals may face higher premiums in life and health insurance due to increased risk—but again, it doesn't account for market-wide premium fluctuations.