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Question No. 1:- Explain the concept of large numbers of law in the insurance sector, and then determining the six requirements of an insurable risk.
Question No. 1:-
Explain the concept of large numbers of law in the insurance sector, and then determining the six requirements of an insurable risk.
Question No. 2:-
Delta Insurance is a property insurer that enter into a surplus reinsurance treaty with Ever safe Re. Delta has a retention limit of $200,000 on any single building, and up to nine lines of insurance may be ceded to Ever safe. A building valued at $1.6m is insured with Delta. Shorty after the policy was issued; a severe windstorm caused a $800,000 loss to the building.
- How much of the loss will Delta pay?
- How much of the loss with Ever safe pay?
- What is the maximum amount of insurance that Delta can write on a single building? Explain your answer.
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