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

Concept of maintenance management, Plant  maintenance consists of all activ...

Plant  maintenance consists of all activities  needed to keep the plant machinery  tools and  equipment services including building and fittings in standards working condition. In

Quantitative methods, This coursework uses a data set from Stock and Watson...

This coursework uses a data set from Stock and Watson's 'Introduction to Econometrics' textbook. The two variables are a three-month interest rate (R90t) and a one-year interest ra

BSBADM405 Organise Meetings, Set up a WHS Consultative Committee and Conduc...

Set up a WHS Consultative Committee and Conduct Meetings

#title.Case study analysis should cover: A well written Rep, Ask question ...

Ask question #Minimum 100 words acceptedBarbara’s New Job Adapted from a case written by Glyn Jones, University of Waikato McShane, S., Olekalns, M. & Travaglione, T. (2010) Organi

Explain the design and implementation process, Question: a) Environmen...

Question: a) Environmental accounting is an important tool for understanding the role played by the natural environment in the economy. Briefly discuss two crucial factors on

Advantage of north west corner method, Advantage of North West Corner Metho...

Advantage of North West Corner Method: a. This methods is very effective as it provide step by step solution. b. It is very simple to obtain optimum solution through this

Explain the term motivation and its importance, QUESTION 1 (a) Define ...

QUESTION 1 (a) Define the term management and explain its functions? (b) Explain the problem solving and Decision-Making Process? QUESTION 2 (a) Explain the term "m

How would you define such type of hazard, A large, 100+ seat inbound call c...

A large, 100+ seat inbound call centre has been getting feedback from the Australian Services Union that their members are dissatisfied with working conditions. The most recent ma

Marketing, micro and macro environment assignment example

micro and macro environment assignment example

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