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5 4.2. Calculate pure premium and actual premium based on the information given below: Expected loss: 2,700,000/= Loss adjustment costs: 300,000/= Probability of loss: 2.5/1000;

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5 4.2. Calculate pure premium and actual premium based on the information given below: Expected loss: 2,700,000/= Loss adjustment costs: 300,000/= Probability of loss: 2.5/1000; Expected return on premium invested: 7.5% per annum Average time difference between receipt of premium and payment of claim: 9 months Loadings: 4% 5 4.2. Calculate pure premium and actual premium based on the information given below: Expected loss: 2,700,000/= Loss adjustment costs: 300,000/= Probability of loss: 2.5/1000; Expected return on premium invested: 7.5% per annum Average time difference between receipt of premium and payment of claim: 9 months Loadings: 4%

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