Why is perfect competition referred as the ideal market structure.

(5 points) Casualty R Us Reinsurance Company has been presented with an opportunity to write a casualty per occurrence excess treaty covering the layer 500,000 excess of 500.000 on a portfolio of umbrella policies. The following limits profile has been provided: Subject Underlying Policy Premium Limit Limit 1.200,000 1.000.000 1.000,000 785,000 1.000.000 2,000,000 An analysis of historical data indicates that the following increased limits factors apply to this portfolio: Policy Limit Increased Limits Factor 500,000 1.00 1,000,000 1.50 1,500,000 1.80 2,000,000 2.00 2,500,000 2.10 3,000,000 2.15 The aggregate excess factor . on the underlying policies is 0.10. (a) (0.5 points) Explain how the aggregate excess factor is analogous to a Table M charge factor. (b) (3 points) Calculate the approximate expected losses in the layer using an exposure rating approach with an expected loss ratio of 60%. Casualty R Us has also been presented with an opportunity to write a casualty per occurrence excess treaty covering the layer 3,000,000 excess of 2,000,000 on the same portfolio of umbrella policies. (c) (0.5 points) Identify the treaty category under which this treaty would fall. (d) (/ point) Describe two ways that a loss on this treaty could occur