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

Bulk purchasing, Every morning a purchasing assistant will take the previou...

Every morning a purchasing assistant will take the previous day's prescription log and parse it into two history files: filled prescriptions (drug name and quantity sold), and unfi

Meaning of hyper-competitive strategies, Explain Which of the following exp...

Explain Which of the following explanations best defines the meaning of hyper-competitive strategies? Ans) ? A) Hyper-competitive methods are about how to compete in fast changi

Important of maintenance management, Important  of Maintenance Management ...

Important  of Maintenance Management 1. Dependability  of Service: it  is one  the performance measures by which  a company  can  distinguish itself from others. To  establis

Theories of business forecasting, What is model building approach of busine...

What is model building approach of business forecasting

International business, VK Ltd a multi-product Company, furnishes you the f...

VK Ltd a multi-product Company, furnishes you the following data relating to the year 2000. First Half of the year Second Half of the year Sales Rs. 4

Economic recorder quantity, Setting Different Levels and Recorder point ...

Setting Different Levels and Recorder point : Just to avoid the chances of over and under investment as well as running short of an item during the course of production m

Theory x and y of mcgregor, 1. Corporate Social Responsibility remains as a...

1. Corporate Social Responsibility remains as an essential part of business practice today. It can improve the reputation of the organisation since stakeholders will know the costs

Legal system, . identify and give out the explanation of different categori...

. identify and give out the explanation of different categories of legal system

When is the 1948s factories act applicable, When is the 1948s factories act...

When is the 1948s factories act applicable? 1948s factories act is applicable to any factory wherein ten or more than ten workers are working. The 1948s factories act has a pro

Applied theory, what are the drawbacks in classical and neo classical theor...

what are the drawbacks in classical and neo classical theories of management

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