Determine expected profit on treaty, Business Management

Assignment Help:

Question:

A small general insurance company (A) writing only property business cedes a quota share reinsurance arrangement to a reinsurance company (B). The treaty cedes 40% of the protected portfolio. A pays 25% commission to acquire the business and has internal expenses of 7.5%. A expects to write £10m of business at a loss ratio of 65%. B bears the ceded proportion of A's acquisition costs and expenses. B's own expenses are 2% of gross premium received by B and B pays the broker 2.5% for the business.

a) Determine B's expected profit on this treaty, stating any assumptions that you make.

b) As a pricing actuary for B you have been shown this treaty by an underwriter. Explain what changes to the treaty you might suggest to the underwriter before the terms are agreed.


Related Discussions:- Determine expected profit on treaty

Business Math, Calculate the cash discount and the net amount due for the f...

Calculate the cash discount and the net amount due for the following transaction. Amount of Invoice Terms of Sale Cash Discount Net Amount Due $12,660.00 2/10, n/45

Ethical Organisational Management, Evaluate factors which could influence o...

Evaluate factors which could influence organisational ethics.

Explain engineering business functions, Identify and explain engineering bu...

Identify and explain engineering business functions. Draw out an organisation chart for an organisation of your choice and explain the roles and functions of an engineering bus

Managerial skills and levels of management, discuss the managerial skills n...

discuss the managerial skills needed at the different levels of management

Marketing principles, explain the various elements of the marketing process...

explain the various elements of the marketing process

Leadership consists, Leadership consists: Leadership happens when peop...

Leadership consists: Leadership happens when people push, cajole, and influence others to work towards the achievement of a specific objective. That distinguishes leadership w

Case study, Where do you stand on the issue

Where do you stand on the issue

Business analysis using triple triangle framework, how to write a company a...

how to write a company analysis in light of the Triple triangle Framework?

Explain how good people management can help an organization, QUESTION T...

QUESTION The Euro crisis will have a major impact on the Mauritian economy. Many businesses in Mauritius depend on European countries for the exportation of their products and

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd