Problem 6-5 An insurance company sells medical insurance for which the actuaries have determined that losses follow Pareto with a-2 There is a franchise deductible of 500 and a maximum covered loss of 10,000 on these policies Average payment per claim above the deductible is 2,500 What is the average loss size (before deductible and Maximum Covered Loss applied) of this coverage? Problem 6-5 An insurance company sells medical insurance for which the actuaries have determined that losses follow Pareto with a-2 There is a franchise deductible of 500 and a maximum covered loss of 10,000 on these policies Average payment per claim above the deductible is 2,500 What is the average loss size (before deductible and Maximum Covered Loss applied) of this coverage