Assume that ABC Insurance Company has purchased from QS Reinsurance Company a quota share treaty with a $500,000 limit and a retention of 30 percent and a cession of 70 percent.  ABC has written three policies.  Policy A insures Building A for $500,000 for a premium of $2,000 with one loss of $10,000.  Policy B insures Building B for $100,000 for a premium of $400 with a one loss of $6,000.  Policy C insures Building C for $1,000,000 for a premium of $4,000 with one loss of $20,000.  Compute the insurance amount (face value of insurance), premiums, and losses under three policies between the primary insurer and the reinsurer.

Answer rating: 100% (QA)

To compute the insurance amount face value of insurance premiums and losses under the three policies ... View the full answer