Q. How does the 'law of large numbers' relate to the predictability of results in insurance?

View solution

Q. What does the 'law of large numbers' principle help insurance companies achieve?

View solution

Q. Identify the two factors that affect insurance ratemaking.

View solution

Q. What is the "pure premium" in insurance ratemaking?

View solution

Q. How is the "pure premium" calculated?

View solution

Q. What does "Burning Cost" refer to in the context of insurance premium?

View solution

Q. What components make up the final rate of premium in insurance?

View solution

Q. Why is it necessary to include a margin for profit in the insurance premium?

View solution

Q. Which rating factors are used to ensure that insurance rates are not unfairly discriminatory?

View solution

Q. What is pure premium?

View solution

Q. What is the purpose of a deductible in insurance policies?

View solution

Q. In which types of insurance policies are deductibles typically used?

View solution

Q. How can an insured potentially lower their insurance premium?

View solution

Q. Why might health insurers require a deductible in their policies?

View solution

Q. In what situations might insurers use deductibles as a risk management strategy?

View solution

Q. What is a franchise in insurance terms?

View solution

Q. How does a franchise work in insurance claims?

View solution

Q. What happens when a claim exceeds the franchise limit?

View solution

Q. What are rating factors used for in insurance?

View solution

Q. How does an insurer use rating factors to determine rates?

View solution