13. A student states correctly that reinsurers normally charge insurers pre- miums which exceed the expected cost of claims they (i.e. the rein- surer) will
13. A student states correctly that reinsurers normally charge insurers pre- miums which exceed the expected cost of claims they (i.e. the rein- surer) will be required to pay under agreed reinsurance arrangements. The student then argues that insurers should therefore not purchase any reinsurance. Do you agree with the student's conclusion? Explain briefly your reasoning
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