Question

Why is it difficult to determine accumulation in catastrophe perils?

a.

It is difficult to demarcate the area exposed to one event

b.

It is difficult to ascertain the total net commitment within the area

c.

PML for one risk may differ from PML for another risk

d.

All of the above

Posted under IC85 Reinsurance Management

Answer: (d).All of the above Explanation:The difficulty in determining accumulation in catastrophe perils is due to the challenges of demarcating the area exposed to one event, ascertaining the total net commitment within the area, and differentiating PML for different risks.

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Q. Why is it difficult to determine accumulation in catastrophe perils?
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