YMRITHVIR WILLEAVE LICUILIUL QIL QIWCE Kimberly-Clark Company owns a warehouse worth $100,000. Ray Van Eperen is the risk manager. Kimberly-Clark faces the risk of fire which would completely destroy their warehouse. The probability of a fire is known to be 9% Kimberly-Clark is considering the following risk management options to address the risk of fire to their warehouse: Retention Full Insurance - Premium = $9,300 Safety Program + Retention Safety Program + Full Insurance (premium - $6,300] The cost of the Safety Program is $2,400. It has the impact of lowering the probability of a fire from 9% to 6%. However, if a fire does occur it is still a total loss. Construct the loss matrix from Kimberly-Clark's perspective. Make sure you show loss in the top row and out-of-pocket cost in the bottom row in each cell of the loss matrix. [2 points] Construct the payout matrix from an insurer's perspective [1 point) What is the actuarially fair premium (AFP) for full insurance with no safety program? What is the AFP for full insurance with safety program? [2 points Kimberly-Clark Company owns a warehouse worth $100,000. Ray Van Eperen is the risk manager, Kimberly-Clark faces the risk of fire which would completely destroy their warehouse. The probability of a fire is known to be 9%. Kimberly-Clark is considering the following risk management options to address the risk of fire to their warehouse: [1] [2] [3] [4] Retention Full Insurance - Premium - $9,300 Safety Program + Retention Safety Program + Full Insurance (premium = $6,300] The cost of the Safety Program is $2,400. It has the impact of lowering the probability of a fire from 9% to 6%. However, if a fire does occur it is still a total loss. Construct the loss matrix from Kimberly-Clark's perspective. Make sure you show loss in the top row and out-of-pocket cost in the bottom row in each cell of the loss matrix. [2 points) Construct the payout matrix from an insurer's perspective. [1 point] What is the actuarially fair premium (AFP) for full insurance with no safety program? What is the AFP for full insurance with safety program? (2 points YMRITHVIR WILLEAVE LICUILIUL QIL QIWCE Kimberly-Clark Company owns a warehouse worth $100,000. Ray Van Eperen is the risk manager. Kimberly-Clark faces the risk of fire which would completely destroy their warehouse. The probability of a fire is known to be 9% Kimberly-Clark is considering the following risk management options to address the risk of fire to their warehouse: Retention Full Insurance - Premium = $9,300 Safety Program + Retention Safety Program + Full Insurance (premium - $6,300] The cost of the Safety Program is $2,400. It has the impact of lowering the probability of a fire from 9% to 6%. However, if a fire does occur it is still a total loss. Construct the loss matrix from Kimberly-Clark's perspective. Make sure you show loss in the top row and out-of-pocket cost in the bottom row in each cell of the loss matrix. [2 points] Construct the payout matrix from an insurer's perspective [1 point) What is the actuarially fair premium (AFP) for full insurance with no safety program? What is the AFP for full insurance with safety program? [2 points Kimberly-Clark Company owns a warehouse worth $100,000. Ray Van Eperen is the risk manager, Kimberly-Clark faces the risk of fire which would completely destroy their warehouse. The probability of a fire is known to be 9%. Kimberly-Clark is considering the following risk management options to address the risk of fire to their warehouse: [1] [2] [3] [4] Retention Full Insurance - Premium - $9,300 Safety Program + Retention Safety Program + Full Insurance (premium = $6,300] The cost of the Safety Program is $2,400. It has the impact of lowering the probability of a fire from 9% to 6%. However, if a fire does occur it is still a total loss. Construct the loss matrix from Kimberly-Clark's perspective. Make sure you show loss in the top row and out-of-pocket cost in the bottom row in each cell of the loss matrix. [2 points) Construct the payout matrix from an insurer's perspective. [1 point] What is the actuarially fair premium (AFP) for full insurance with no safety program? What is the AFP for full insurance with safety program? (2 points
