Given Coastlandia State Insurance financials prior to a large loss event, large loss amount incurred as a result of a hurricane, and the rate increase needed, calculate the insurers 1) loss ratios before and after the hurricane, and the

2) premium-to-policyholders surplus ratio that reflects the large incurred loss. Incurred losses prior to hurricane: $400 Million Estimated hurricane claims: $2 Billion Earned Premiums prior to hurricane: $1.5 Billion Earned Premiums for full year: $1.75 Billion Net written premiums for full year: $1.8 Billion PHS prior to hurricane: $

3) If Coastlandia raises its rates by 10% for the next policy year, what impact (in actual calculated ratio difference) will this have on the premium-to-PHS ratio immediately, assuming same properties are insured for same amounts as the prior year?

4) Calculate the amount the insurer should be willing to spend on a roofing mitigation (loss control) program if there is a 20% chance of hurricane that would cause estimated damage of $12,000 per roof over $1,500 roofs, and the upgraded (mitigated) roof would result in $8,500 claims savings per roof?