This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: Nathan was hired as an actuary with ABC Insurance. Nathan was asked to calculate the annual premium ... (Read 161 times)

dmcintosh

  • Hero Member
  • *****
  • Posts: 517
on: Jul 11, 2018
Nathan was hired as an actuary with ABC Insurance. Nathan was asked to calculate the annual premium for a new product and to explain his calculations to ABC's director of ratemaking.
 
  Nathan calculated the pure premium and presented this value as the final premium. After Nathan's presentation, the director of ratemaking said, You left out something very important. If we sell coverage at the pure premium rate, we'll be out of business soon. What did Nathan overlook in his calculations?
  A) loading for expenses
  B) the underwriting cycle
  C) seasonality of claims
  D) investment income

Question 2

Which of the following statements about experience rating is (are) true?
 
  I. The insured's past loss experience is used to determine the premium for the next policy period.
  II. Its use is generally limited to small firms whose actual experience lacks credibility.
  A) I only
  B) II only
  C) both I and II
  D) neither I nor II


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

zogaridan

  • Sr. Member
  • ****
  • Posts: 328
Reply #1 on: Jul 11, 2018
Answer to Question 1

Answer: A

Answer to Question 2

Answer: A


dmcintosh

  • Member
  • Posts: 517
Reply 2 on: Jul 11, 2018
Excellent

cdmart10

  • Member
  • Posts: 332
Reply 3 on: Yesterday
:D TYSM

« previous next »
 

Did you know?

Hip fractures are the most serious consequences of osteoporosis. The incidence of hip fractures increases with each decade among patients in their 60s to patients in their 90s for both women and men of all populations. Men and women older than 80 years of age show the highest incidence of hip fractures.

Did you know?

The eye muscles are the most active muscles in the whole body. The external muscles that move the eyes are the strongest muscles in the human body for the job they have to do. They are 100 times more powerful than they need to be.

Did you know?

The use of salicylates dates back 2,500 years to Hippocrates's recommendation of willow bark (from which a salicylate is derived) as an aid to the pains of childbirth. However, overdosage of salicylates can harm body fluids, electrolytes, the CNS, the GI tract, the ears, the lungs, the blood, the liver, and the kidneys and cause coma or death.

Did you know?

Human stomach acid is strong enough to dissolve small pieces of metal such as razor blades or staples.

Did you know?

Blastomycosis is often misdiagnosed, resulting in tragic outcomes. It is caused by a fungus living in moist soil, in wooded areas of the United States and Canada. If inhaled, the fungus can cause mild breathing problems that may worsen and cause serious illness and even death.

During their annual migration, the entire population of Arctic terns move from the Arctic Ocean in t During their annual migration, the entire population of Arctic terns move from the Arctic Ocean in t
The bore and stroke of pistons are used to calculate an engine’s displacement. The bore and stroke of pistons are used to calculate an engine’s displacement.
How to calculate credit card interest when the interest is compounded How to calculate credit card interest when the interest is compounded
How to calculate the gain and loss gene numbers with low bootstrap of phylogenetic tree? How to calculate the gain and loss gene numbers with low bootstrap of phylogenetic tree?
Calculate KP for the following reactions at the indicated temperature. Calculate KP for the following reactions at the indicated temperature.
Life Table for an Annual Plant Cohort Life Table for an Annual Plant Cohort
Video: Muscle cell structures - actin, myosin and titin filaments

For a complete list of videos, visit our video library