Define labor economics;

A general insurance company uses exposure curves to estimate losses on commercial property risks. Suppose Y is a random variable representing the size of loss as a proportion of the total sum insured (A). The exposure curve is defined as: (G(x) = LEV(x) / E[ Y], for x > 0, where LEV(x) is the limited expected value function: LEVx) = [. (1-FO)dy. where A(y) is the cumulative density function of F. The following table gives values from an exposure curve that is used to price a commercial property risk with a total value of $1m. G(v 2.5% 7.0%% 5.0% 14.0%% 7.5% 20.0% 10.0% 27.0% 25.0% 56.0% 50.0% 84.0%% 75.0% 97.0%% Using this curve, the expected loss to a policy covering the layer $475k in excess of $25k has already been calculated as $10,000. Calculate the expected loss to the layer $700k in excess of $50k. (3] A general insurance company is considering the introduction of an "early bird" offer for renewals on its existing book of personal lines policies. Renewal is not automatic and the policy will lapse if no instruction to renew is given. Customers who give instruction to renew at least a month before the renewal date would receive a discount from the standard renewal price. The company has no experience of running such an offer. The company wishes to determine the level of discount to be offered in order to increase the profitability of the book by a target amount over the period of the offer. Outline the process that the company should follow. [71