Question
In: Finance
In bearing risk, what disadvantages do insurance companies face?
In bearing risk, what disadvantages do insurance companies face?
Solutions
Expert Solution
The disadvantages that the insurance companies bear is that, as they insure the insured against the risks they have to pay compensation in case the uncertain event actually takes place. It provides compensation in case any kind of loss or damage has occurred to property or death or critical illness of an individual . In case the amount of compensation paid to the insured is more than the amount of premium received by the insurance company, in that case the insurance company suffers a loss for bearing the risk.
jeff jeffy answered 2 years agoRelated Solutions
What do we mean by a risk? What are some examples of risks companies face? •...
What do we mean by a risk? What are some examples of risks
companies face?
• What are internal controls? What is the relationship between an
internal control and a risk? Be able to identify internal controls
that can be used to address specific risks.
what is the tools of risk management for insurance companies ?
what is the tools of risk management for insurance companies
?
What risk does an insurance professional face if they do business without the appropriate license?
What risk does an insurance professional face if they do
business without the appropriate license?
1. In terms of insurance, what is moral hazard and what do insurance companies do to...
1. In terms of insurance, what is moral hazard and what do
insurance companies do to try to offset it? 2. How did the drop in
the birth rate cause problems for Social Security, and how would
raising the benefits age help save the system? 3. How did finance
companies misrepresenting the risk of adjustable-rate mortgages and
offering second mortgages for more than a home's value contribute
to the financial crisis? 4. . What exactly is the role of...
Do you consider it to be unethical for insurance companies to charge high-risk people a higher...
Do you consider it to be unethical for insurance companies to
charge high-risk people a higher premium than low-risk people?
Insurance companies know the risk of insurance is greatly reduced if the company insures not just...
Insurance companies know the risk of insurance is
greatly reduced if the company insures not just one person, but
many people. How does this work? Let x be a random
variable representing the expectation of life in years for a
25-year-old male (i.e., number of years until death). Then the mean
and standard deviation of x are μ = 48.7 years
and σ = 10.3 years (Vital Statistics Section of the
Statistical Abstract of the United States, 116th
Edition).
Suppose...
Insurance companies know the risk of insurance is greatly reduced if the company insures not just...
Insurance companies know the risk of insurance is greatly
reduced if the company insures not just one person, but many
people. How does this work? Let x be a random variable representing
the expectation of life in years for a 25-year-old male (i.e.,
number of years until death). Then the mean and standard deviation
of x are μ = 52.4 years and σ = 12.1 years (Vital Statistics
Section of the Statistical Abstract of the United States, 116th
Edition).
Suppose...
Insurance companies know the risk of insurance is greatly reduced if the company insures not just...
Insurance companies know the risk of insurance is greatly
reduced if the company insures not just one person, but many
people. How does this work? Let x be a random variable representing
the expectation of life in years for a 25-year-old male (i.e.,
number of years until death). Then the mean and standard deviation
of x are μ = 52.5 years and σ = 10.1 years (Vital Statistics
Section of the Statistical Abstract of the United States, 116th
Edition). Suppose...
Insurance companies willingly take on our risk for a fee. Give an example of a risk...
Insurance companies willingly take on our risk for a fee. Give
an example of a risk that you or someone else has chosen to
insure.
How could you use your technology skill and Excel to organize
and analyze data and help you decide if a specific insurance is a
good value for the example you gave? Think about the cost and
consequences of not having insurance versus the cost of the
insurance over time.
Why do companies allocate costs? What are some of the advantages and disadvantages to doing so? ...
Why do companies allocate costs? What are some of the advantages
and disadvantages to doing so?
What are the similarities and differences among the direct
method, the step method and the reciprocal method of allocating
costs?
Accounting is objective and precise. Therefore, performance
measures based on accounting numbers must be objective and precise.
Do you agree? Why or why not?
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Discuss the significance of a proposal What elements do you think are needed for the proposal...
- 1) Given the following equations: QD = 5,000 + 0.5 I + 0.2 A -...
- How has the Supreme Court's Citizens United decision changed campaigns in America? (long answer is appreciated...
- You are a Derivatives Trader at a major Broker-Dealer. At the end of the week you...
- What are the two reasons that limit the ability of correlational studies to provide information on...
- Suppose that 20 monthly payments of $100 each are followed by 30 monthly payments of $200...
- D. Explain what it means for recommendations to be specific and actionable. E. Discuss how charts...
ADVERTISEMENT