What are the four broad categories of measuring economic freedom

(5 points) CRU insurance company has two subsidiaries, ERU and HRU. ERU has only earthquake exposure. The exposure is in three regions. The catastrophe model for these risks indicates that in each region there is an annual loss probability of p and if there is a loss, the amount is L. Losses in the three regions are mutually independent. Values from the model are: ERU Model Results Region P L (in millions) 0.01 100 0.02 200 0.03 400 HRU has only hurricane exposure. The exposure is in four regions. The catastrophe model for these risks produces the same type of results as for earthquakes. Losses in the four regions are mutually independent. Values from the model are: HRU Model Results Region P L (in millions) 0.02 500 0.04 400 0.06 200 0.07 100 The correlation coefficient of total losses in one year for ERU and HRU is 0.2. The risk load multiplier is 0.000025x10*. (a) (2 points) Calculate the variance risk load for the combined portfolio. (b) (/ point) Calculate the risk loads for each of ERU and HRU using the Shapley method. To use the Marginal Variance method, a decision must be made to use either renewal risk loads or build-up risk loads. (c) (0.5 points) Identify which approach will ensure that the separate risk loads will add up to the combined portfolio risk load calculated in part (a).(5 points) Beta Reinsurance Company writes property per risk excess reinsurance and uses an exposure curve to price its treaties that is defined by, where x is the proportion of insured value, Exposure Factor =1- 1.2 ,0