An insurer enters into the following treaty with three reinsurers. Reinsurance will only kick in

after the insurance company has suffered losses up to a $$1$ Million.

Reinsurer A offers to provide protection for losses from $$1$ Million to $$2$ Million

Reinsurer B offers to provide protection for losses from $$2$ Million to $$3$ Million

Reinsurer C offers to provide protection for losses from $$3$ Million to $$4$ Million

Any losses above $$4$ Million is the responsibility of the insurer.

Which reinsurer is most expensive?

B

A

All reinsurers will charge the same price since their responsibility is for a million dollars

C