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 127 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
:D TYSM

smrtceo

  • Member
  • Posts: 344
Reply 3 on: Yesterday
Great answer, keep it coming :)

« previous next »
 

Did you know?

Everyone has one nostril that is larger than the other.

Did you know?

Astigmatism is the most common vision problem. It may accompany nearsightedness or farsightedness. It is usually caused by an irregularly shaped cornea, but sometimes it is the result of an irregularly shaped lens. Either type can be corrected by eyeglasses, contact lenses, or refractive surgery.

Did you know?

According to the National Institute of Environmental Health Sciences, lung disease is the third leading killer in the United States, responsible for one in seven deaths. It is the leading cause of death among infants under the age of one year.

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?

Studies show that systolic blood pressure can be significantly lowered by taking statins. In fact, the higher the patient's baseline blood pressure, the greater the effect of statins on his or her blood pressure.

Median Annual Earnings of Full-Time Workers, by Gender, 1960–2010 Median Annual Earnings of Full-Time Workers, by Gender, 1960–2010
Types of Health Insurance Service Coverage Types of Health Insurance Service Coverage
How to calculate fuel costs How to calculate fuel costs
In plant fossils, leaf margin is used to estimate mean annual temperature In plant fossils, leaf margin is used to estimate mean annual temperature
An organizational specialist is hired as a consultant to a company planning to open a coffee ... An organizational specialist is hired as a consultant to a company planning to open a coffee ...
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?
Video: Passive Smoke Exposure

For a complete list of videos, visit our video library