1. An insurer has a portfolio of 1000 independent one-year term insurance policies. For any one...

1. An insurer has a portfolio of 1000 independent one-year term insurance policies. For any one policy, there is a probability of 0.01 that there will be a claim. Use the normal approximation to find the probability that the insurer will experience at least 10 claims using the integer correction.

Solutions

Expert Solution

orchestra answered 2 years ago

Next > < Previous

Related Solutions

An insurer issues a five-year term insurance to (65), with a benefit of $100 000 payable...

An insurer issues a five-year term insurance to (65), with a benefit of $100 000 payable at the end of the year of death. Calculate the probability that the present value of the benefit is greater than $90 000, using the Standard Ultimate Life Table, with interest of 5% per year effective.

1. The number of claims in a month for a portfolio of insurance policies is thought...

1. The number of claims in a month for a portfolio of insurance policies is thought to follow the Negative-binomial distribution with pdf ?(?) =( Γ(20+?) / Γ(? +1)Γ(20) ) . ?^20 . (1−?)^?, ? = 0,1,2,… A sample of 4 months had claim numbers of 15, 25, 20 and 21. a) There is no prior information for p. Using an uninformative prior to derive the posterior distribution for p. [12 marks] b) Show that the mode of the Beta...

An insurance company holds fraud insurance policies on 6,000 firms. In any given year the probability...

An insurance company holds fraud insurance policies on 6,000 firms. In any given year the probability that any single policy will result in a claim is 0.001. Find the probability that at least 3 claims are made in a given year. Use the Poisson approximation to the binomial distribution.

Consider a portfolio of insurance policies, on which the number of claims has a binomial distribution...

Consider a portfolio of insurance policies, on which the number of claims has a binomial distribution with parameters n = 1,000 and p = 0.01. The claim size distribution is assumed to be exponential with mean $100. Claim amounts are assumed to be independent random variables, and the claim amounts are independent of the number of claims. The insurer takes out an individual excess of loss reinsurance contract with a retention level of $200. Calculate the mean of the aggregate...

An insurance company is issuing 16 independent car insurance policies. If the probability for a claim...

An insurance company is issuing 16 independent car insurance policies. If the probability for a claim during a year is 15 percent, what is the probability (correct to four decimal places) that there will be more than two claims during the year?

What is the difference between Whole Life Insurance and Term life Insurance policies?

A life insurance company sells a $150,000 one year term life insurance policy to a 21-year...

A life insurance company sells a $150,000 one year term life insurance policy to a 21-year old female for $150. The probability that the female survives the year is .999724. Find the expected value for the insurance company.

suppose a life insurance company sells a $240,000 one year term life insurance policy to a...

suppose a life insurance company sells a $240,000 one year term life insurance policy to a 19 year old female for $270. the probability that the female survives the year is .999522. compute and interpret the expected value if this policy to the insurance company. the expected value is $______

An insurance company insures 2,000 people each year, each of whom has a 1/1000 chance of...

An insurance company insures 2,000 people each year, each of whom has a 1/1000 chance of an accident in 1 year. Use the Poisson approximation to compute the probability that there will be at most 2 accidents. Also, calculate the exact binomial-(n,p) probability

Suppose a life insurance company sells a $200,000 one-year term life insurance policy to a 23-year-old...

Suppose a life insurance company sells a $200,000 one-year term life insurance policy to a 23-year-old female for $190. The probability that the female survives the year is 0.999594. Compute and interpret the expected value of this policy to the insurance company.

Subjects