Question

What is the importance of the gross experience of a class concerned?

a.

It determines the additional cost of excess of loss reinsurance cover

b.

It determines the anticipated incurred loss ratio to the gross and net accounts

c.

It determines the commission earned on ceded business

d.

It determines the types of risks that should be reinsured

Answer: (b).It determines the anticipated incurred loss ratio to the gross and net accounts Explanation:The gross experience, over a period of say five years, of the class concerned is one of the important basis which determines the anticipated incurred loss ratio to the gross and net accounts in a class.

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Q. What is the importance of the gross experience of a class concerned?

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