Question

What might a new insurance company do with a large part of its expenses?

a.

Allocate them to investment opportunities

b.

Amortize them over a number of years

c.

Use them to increase profit margins

d.

Share them with existing insurance companies

Posted under IC 92 Actuarial Aspects of Product Development

Answer: (b).Amortize them over a number of years Explanation:A new insurance company may amortize a large part of its expenses over a number of years, especially considering the difficulty in projecting business growth and the competitive nature of the market.

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Q. What might a new insurance company do with a large part of its expenses?
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