3. An insurer ﬁnds that the time until occurrence of a claim from its property insurance...

3. An insurer ﬁnds that the time until occurrence of a claim from its property insurance division is exponentially distributed with a mean of 1 unit of time, and the time until occurrence of a claim from its life insurance division is exponentially distributed with a mean of 2 unites of time. Claims occur independently in the two divisions. Find the expected time until the ﬁrst claim occurrence, property of life.

Expert Solution

for property insurance division mean λ1=1 unit

and for life insurance division λ2=2 unit

expected time until the ﬁrst claim occurrence =1/(λ1+λ2) =1/(1/1+1/2) =2/3 unit

orchestra answered 2 years ago

A property–casualty insurer brings in $6.22 million in premiums on its homeowners MP line of insurance....

A property–casualty insurer brings in $6.22 million in premiums on its homeowners MP line of insurance. The line’s losses amount to $4,304,240, expenses are $1,567,440, and dividends are $136,840. The insurer earns $199,040 in the investment of its premiums. Calculate the line’s loss ratio, expense ratio, dividend ratio, combined ratio (after dividends), investment ratio, operating ratio, and overall profitability. (Do not round intermediate calculations. Round your answers to 1 decimal place. (e.g., 32.1)) Loss ratio% Expense ratio% Dividend ratio% Combined...

A property–casualty insurer brings in $7.5 million in premiums on its homeowners multiple line of insurance....

A property–casualty insurer brings in $7.5 million in premiums on its homeowners multiple line of insurance. The line’s losses amount to $4,862,700, expenses are $2,026,150, and dividends are $222,300. The insurer earns $249,650 in the investment of its premiums. Calculate the line’s: a) loss ratio b) expense ratio c) dividend ratio d) combined ratio e) investment ratio f) operating ratio g) overall profitability how profitable is the line

Which of the following statements is TRUE? Occurrence-based liability insurance exposes the insurer to long-tail claims....

Which of the following statements is TRUE? Occurrence-based liability insurance exposes the insurer to long-tail claims. In commercial liability policies, umbrella policies provide primary coverage, while general liability insurance provides excess coverage. Inland marine insurance provides coverage mainly for transport on inland waterways. Under the doctrine of contributory negligence, a plaintiff is compensated after taking into account his/her responsibility in a loss claim.

Delta Insurance is a property insurer that enters into a reinsurance treaty for Eversafe Re. Delta...

Delta Insurance is a property insurer that enters into a reinsurance treaty for Eversafe Re. Delta has a retention limit of $200,000 on any single building. A building valued at $1,600,000 is insured with Delta. Shortly after the policy was issued, a severe windstorm caused a $800,000 loss to the building. 1.If the reinsurance is a excess-of-loss treaty with a maximum limit of $1,800,00, how much Delta Insurance has to pay for the loss? 2.If the reinsurance is a surplus-share...

Which has the burden of proof concerning an insurance claim? a. insured b. insurer c. third...

Which has the burden of proof concerning an insurance claim? a. insured b. insurer c. third party d. court e. none of these

The _____ clause is a provision in a life insurance policy that prevents the insurer from...

The _____ clause is a provision in a life insurance policy that prevents the insurer from avoiding or revoking the coverage after a certain number of years of premium payments on the policy, even if the insured committed fraud in applying for the policy. concealment subrogation no-fault incontestable insurable interest

3) Lawrence lives in California but buys his automobile insurance from a Nebraska insurer, which violates...

3) Lawrence lives in California but buys his automobile insurance from a Nebraska insurer, which violates California law. He uses his parents’ address in Nebraska when filling out the application in order to pay the lower Nebraska premium rates. (a) Which legal doctrine does this potentially violate? (b) What criteria are used to determine whether or not he was in violation? (c) What could happen if he is involved in an accident?

Danny's MegaHouse has property insurance on a replacement cost basis with a $5,000 per occurrence deductible....

Danny's MegaHouse has property insurance on a replacement cost basis with a $5,000 per occurrence deductible. It can install automatic sprinklers in its warehouse for an initial cost of $10,000. The sprinklers will last five years. Annual maintenance of the sprinklers will be $1,000, payable at the end of each year for the first four years from the time of installation. If Wood installs the sprinklers, it will deduct one-fourth of the installation price at the end of each year...

An insured may borrow or withdraw the cash value from the insurer when need for insurance...

An insured may borrow or withdraw the cash value from the insurer when need for insurance protection has not yet lapsed. True False

9. The phrase ________ describes a claim presented to a property-casualty insurance company years after the...

9. The phrase ________ describes a claim presented to a property-casualty insurance company years after the relevant underlying insured occurrence. A. A long-tail loss B. A mismatched claim C. Adverse selection D. Social inflation E. The underwriting cycle 10. The ____ facilitates cooperation among the various state agencies whenever an insurance issue is a national concern. A. Securities and Exchange Commission B. Federal Deposit Insurance Corporation C. National Association of Insurance Commissioners D. National Association of Securities Dealers E. none...

Question