Assume an insurer writes n policies. The data in the table below shows historical loss information from a previous year. How much should the insurer charge each policyholder to be 99.5 percent sure it can meet all its claim obligations at the end of the policy year assuming n=1000? Rework your answer for n=1500, n=2000. Discuss what happens to the premium per policyholder as you adjust n. Range Start End Num 0 400 12 400 800 45 800 1200 42 1200 1600 37 1600 2000 26 2000 2400 16 2400 2800 8 2800 3200 4 3200 3600 1 3600+ 0
Added by Matthew C.
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- Premium amount = 1000 * 99.5 = 995 - Range: 800 to 1200 - Premium per policyholder = 42 ** Show more…
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