Part II Insurer Pricing An insurer sells a one-year policy to many people with the following loss distributions: Size of loss 50,000 30,000 10,000 5,000 0 Probability of loss 0.005 0.01 0.02 0.05 0.915 Assume: 1) The fair premiums, the administrative expenses and the profit loading are all paid at the beginning of the year; 2) The claims are paid one year later; 3) The interest rate is 8%;/ 4) The administrative expenses are assumed to be 10% of the fair premiums; 5) The profit loading is assumed to be 5% of the expected claim costs. Find the fair premium for the policy