Question

How can a geographical concentration of risks affect an insurer's portfolio?

a.

It can expose a greater proportion of the portfolio to one large catastrophic event.

b.

It can help spread the risk evenly across the portfolio.

c.

It has no effect on an insurer's portfolio.

d.

None of the above

Posted under IC85 Reinsurance Management

Answer: (a).It can expose a greater proportion of the portfolio to one large catastrophic event. Explanation:A geographical concentration can expose a greater proportion of the portfolio to one large catastrophic event.

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Q. How can a geographical concentration of risks affect an insurer's portfolio?
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