Question

What types of expenditure are included in the calculation of ultimate net loss?

a.

Salaries of employees and office costs of the insurer

b.

Survey reports and assessor's fees

c.

Salvage costs and legal costs

d.

Both b and c

Posted under IC85 Reinsurance Management

Answer: (d).Both b and c Explanation:The ultimate net loss includes all sums paid in respect of the claim as well as all expenditure incurred by the insurer in connection with the claim, such as survey reports, assessor's fees, salvage costs, legal costs, interest, etc. However, salaries of employees and office costs of the insurer are not included in the calculation of the claims’ costs.

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Q. What types of expenditure are included in the calculation of ultimate net loss?
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