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Question 2 ( 1 5 marks ) ABC insurance company has two lines of insurance business: Portfolio A: risks are relatively homogenous with similar sizes
Question marks ABC insurance company has two lines of insurance business: Portfolio A: risks are relatively homogenous with similar sizes and risk profiles Portfolio B: risks are quite heterogenous with dissimilar sizes and some risks are quite hazardous Name one proportional reinsurance that is appropriate for ABC insurance company to transfer some liabilities of Portfolio A marks Discuss the impacts of the proposed reinsurance on ABC insurance company's income statement. marks ABC insurance company is concerned about the potential exposure of Portfolio A to certain natural catastrophes that can cause correlated losses and would like to further limit its retention under proportional reinsurance proposed in Explain how ABC insurance can achieve this objective. marks Due to the nature of the risk in Portfolio B some large and hazardous risks are excluded from the treaty reinsurance between ABC insurance company and its treaty reinsurer. Name two options for ABC insurance company to obtain reinsurance coverage for these excluded risks. marks
Question marks ABC insurance company has two lines of insurance business:
Portfolio A: risks are relatively homogenous with similar sizes and risk profiles
Portfolio B: risks are quite heterogenous with dissimilar sizes and some risks are quite
hazardous
Name one proportional reinsurance that is appropriate for ABC insurance company to transfer
some liabilities of Portfolio A marks
Discuss the impacts of the proposed reinsurance on ABC insurance company's income
statement. marks
ABC insurance company is concerned about the potential exposure of Portfolio A to certain
natural catastrophes that can cause correlated losses and would like to further limit its retention
under proportional reinsurance proposed in Explain how ABC insurance can achieve this
objective. marks
Due to the nature of the risk in Portfolio B some large and hazardous risks are excluded from
the treaty reinsurance between ABC insurance company and its treaty reinsurer. Name two
options for ABC insurance company to obtain reinsurance coverage for these excluded risks.
marks
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