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Continuing on from problem 5, suppose the insurer chose to use the excess of loss / non- proportional method. How much loss exposure would

Continuing on from problem 5, suppose the insurer chose to use the excess of loss / non- proportional method. How much loss exposure would the reinsurer assume? How much premium might the reinsurer receive for assuming this risk? Suppose a loss of $60,000 occurred. How much of that loss would the insurer pay? How much would the reinsurer pay?

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