Question

What three factors does stability in the claims ratio depend on?

a.

The number of individual risks, standard deviation, and probable maximum loss by one event to the premium of the portfolio

b.

The number of individual risks, the standard deviation, and loss exposures

c.

The expected variation in the frequency of loss occurrences, probable maximum loss by one event to the premium of the portfolio, and the credit rating of the insurer

d.

The expected variation in the frequency of loss occurrences, the number of individual risks, and the credit rating of the insurer

Answer: (a).The number of individual risks, standard deviation, and probable maximum loss by one event to the premium of the portfolio Explanation:Stability in the claims ratio will depend on the number of individual risks constituting the portfolio, the standard deviation or expected variation in the frequency of loss occurrences, and the ratio of probable maximum loss by one event to the premium of the portfolio.

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Q. What three factors does stability in the claims ratio depend on?

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