Question
Suppose an insuur estimates that an exposure has the following lost distribution: 600,000 with probability .01 Loss= 100,000 with probability .02 30,000 with probability .03
Suppose an insuur estimates that an exposure has the following lost distribution:
600,000 with probability .01
Loss= 100,000 with probability .02
30,000 with probability .03
0 with probability .94
1. Redo question 1 assuming it is an 8% interst rate.
2. Redo 1 assuming assuming claim payments are not made until 2 years after the premium is recieved.
3. Based on the answer of 8476.19 and 3, make general statements about the effect of interest rates and the claim tails on insurance premiums.
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Gapenskis Cases In Healthcare Finance
Authors: George H. Pink
6th Edition
1567939651, 978-1567939651
