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HEALTHY FISH LTD Healthy Fish Ltd. insures against accidents of its motor fleet. The fleet consists of highly specialised, imported refrigerator trucks. Contributing factors to the high number of incidents are the poor conditions of the municipal and provincial roads. Table 1: Loss experience of the motor fleet over the last five years Year No. of vehicles loss Average event per No of accidents Total cost for the year 1 2 3 20 20 25 30 50 R1,500,000 R2,200,000 R1,750,000 R2,000,000 R3,500,000 10 12 15 20 25 R15,000,000 R26,400,000 R26,250,000 R40,000,000 R87,500,000 4 5 Table 2: Quotations under consideration for the insurance of the motor fleet Quote number Quoted annual premium Annual limit for damage to motor fleet Deductible | R15,000,000.00 R10,000,000.00 R8,500,000.00 R6,000,000.00 R5,000,000.00 R60,000,000 R30,000,000 R25,000,000 R20,000,000 R10,000,000 RO R25,000 R50.000 Question 1 Calculate the optimum deductible according to the total expected cost (TEC) rule Show all calculatio... (8 marks) HEALTHY FISH LTD Healthy Fish Ltd. insures against accidents of its motor fleet. The fleet consists of highly specialised, imported refrigerator trucks. Contributing factors to the high number of incidents are the poor conditions of the municipal and provincial roads. Table 1: Loss experience of the motor fleet over the last five years Year No. of vehicles loss Average event per No of accidents Total cost for the year 1 2 20 20 25 3 R1,500,000 R2,200,000 R1,750,000 R2,000,000 R3,500,000 10 12 15 20 25 R15,000,000 R26,400,000 R26,250,000 R40,000,000 R87,500,000 4 5 30 50 Table 2: Quotations under consideration for the insurance of the motor fleet Quoted annual premium Quote number Annual limit for damage to motor fleet Deductible 1 2 3 4 R15,000,000.00 R10,000,000.00 R8,500,000.00 R6,000,000.00 R5,000,000.00 R60,000,000 R30,000,000 R25,000,000 R20,000,000 R10,000,000 RO R25,000 R50,000 R70,000 R100,000 5 Question 1 Calculate the optimum deductible according to the total expected cost (TEC) rule Show all calculations. (8 marks)