Subject - Financial Risk Management

Ahmed owns a mansion. He wants to insure it for BD 500,000. The agent facilitated the underwriting to three insurance companies. Insurance A will insure BD 100,000 while Insurance B and C will cover BD 120,000 and BD 200,000 respectively. If Kobes mansion incurred a loss of BD 400,000, how much will be paid by each insurance company using the following provisions;

A. Pro Rata Liability. (2 mark for the correct process + 1 mark for the correct answer = 3 marks)

B. Contribution by Equal Shares. (2 mark for the correct process + 1 mark for the correct answer = 3 marks