FIN 512 Chapter Notes - Chapter 1-8: Lump Sum, Liability Insurance, Life Insurance

206 views2 pages
Department
Course
Professor

Document Summary

2. class/manual rating applies to class of risk exposures individual/merit rating reflects loss experi. of ind. risk. Total losses/claims exposure units = pure/net premium. Pure premium (1 expense ratio) = gross premium (expense ratio includes admin & selling costs and profit) Aka: loss ratio = losses incurred premiums earned (>50%) Expense ration = (expenses incurred + profit) premiums written. Expected losses premiums earned = expected loss ratio. Increase/decrease in actual loss vs expected loss (actual ratio expected ratio) expected ratio = rate change new rate = rate x increase/decrease % change ^ Experience rating (use rate change from loss ratio method) Rate change x credibility factor = reduction in rate change. Based on underwriter"s judgement for specific risk: ocean marine. Based on unknown assumptions and rates set by applying schedule of charges (commercial buildings) Based on unknown assumptions and actual premium is not determined until the period of coverage is over. Product liability insurance = every of sales.

Get access

Grade+20% off
$8 USD/m$10 USD/m
Billed $96 USD annually
Grade+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
40 Verified Answers
Class+
$8 USD/m
Billed $96 USD annually
Class+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
30 Verified Answers

Related Documents