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

Two of your key team members are on 3-weeks leave, You are a team manager h...

You are a team manager having 15 members in your team. Two of your key team members are on 3-weeks leave. You have to call for a monthly  team meeting within a week. How effectivel

Labour in promotion of productivity, What types of quality use for labour i...

What types of quality use for labour in promotion of productivity? Labour in promotion of productivity: a. Enhancement in work methods, via work study techniques b. Pr

Reseach nuclear energy from a global perspective., how can one examing this...

how can one examing this industry from a global perspective without getting plagiarism.

Control, why should control target top management

why should control target top management

The stages involved in composing a written business message, QUESTION 1 ...

QUESTION 1 You are required to give a presentation to a group of 20 staff within your department. Discuss the factors that you should consider in order to make an effective ora

Determinants at the organizational and community level, 1. Develop a handou...

1. Develop a handout that clearly outlines the distinguishing facets of 2 different models & interventions involving determinants at the organizational, community, and society leve

Explain the theories of belbin and tuckman, Mr. Brian Smith is the 0fficer-...

Mr. Brian Smith is the 0fficer-in-charge of a group of 15 persons, all posted in the correspondence/registry services of the Texman Services, a company in the insurance business.

What is break-even point, What is break-even point? Break-even point:...

What is break-even point? Break-even point: Break-even point is the volume of output at that neither a loss is incurred nor a profit is created. The break even analysis c

Explain by the term cultural shock, QUESTION 1 (a) Explain by the term...

QUESTION 1 (a) Explain by the term "cultural shock"? Support your answer with examples (b) Ethnocentrism is one of the barriers of communication. Clearly explain how does i

Sales communication techniques, Sales communication techniques: Sales ...

Sales communication techniques: Sales communication techniques will provide some helpful techniques to use while communicating with customers. We will look at the dos and d

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