ii) H) Explain why insurance companies want smooth profits. [4] Explain why using quota-share reinsurance may...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
ii) H) Explain why insurance companies want smooth profits. [4] Explain why using quota-share reinsurance may reduce the volatility of profits for an insurance company that sells domestic property insurance. [5] Explain why using risk excess of loss reinsurance may reduce the volatility of profits for an insurance company that seils liability insurance. Explain the balance that must be struck in the monitoring stage of the actuarial control cycle. [4] ii) H) Explain why insurance companies want smooth profits. [4] Explain why using quota-share reinsurance may reduce the volatility of profits for an insurance company that sells domestic property insurance. [5] Explain why using risk excess of loss reinsurance may reduce the volatility of profits for an insurance company that seils liability insurance. Explain the balance that must be struck in the monitoring stage of the actuarial control cycle. [4]
Expert Answer:
Answer rating: 100% (QA)
1 Insurance companies want smooth profits because it allows for better financial planning and stability Here are a few reasons why smooth profits are desirable Financial Stability By guaranteeing a co... View the full answer
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date:
Students also viewed these finance questions
-
Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...
-
The following additional information is available for the Dr. Ivan and Irene Incisor family from Chapters 1-5. Ivan's grandfather died and left a portfolio of municipal bonds. In 2012, they pay Ivan...
-
Brexit and Rolls-Roycel Rolls said it "remains committed to the UK where we are headquartered, directly employ over 23,000 talented and committed workers and where we carry out a significant majority...
-
PacTec Luggage Shop is a small retail establishment located in a large shopping mall. This shop has implemented the following procedures regarding inventory items: a. Since the display area of the...
-
Determine the location of the centroid y' of the beam constructed from the two channels and the cover plate. If each channel has a cross-sectional area Ac and a moment of inertia about a horizontal...
-
Three long, parallel wires are arranged as shown in Fig. 5-43 (P5.18 (a)). Determine the force per unit length acting on the wire carrying I3. O 4 = 10A 2m I3 = 10A 2m- 2m 1 = 10A Figure P5.18: (a)...
-
For each of the following notes receivable, compute the amount of interest revenue earned during 2010. Use a 360-day year, and round to the nearest dollar. Note 1 Note 2 Note 3 Note Principal...
-
T. L. Jones Trucking Services establishes a petty cash fund on April 3 for$500. By the end of April, the fund has a cash balance of $32 and has receipts for the following items: Utilities...
-
1. Was the removal of the Multi-Fiber Agreement a positive thing for the world economy? Why? 2. As a producer in a developing nation such as Bangladesh that benefited from the MFA agreement. how...
-
The decision maker wishes to maximize the total benefit associated with three activities X, Y, and Z. The price per unit of activities, X, Y, and Z is $1, $2, and $3 respectively. The following table...
-
TaylorMade-Adidas Golf Company, a subsidiary of Adidas, manufactures golf clubs using "adjustable weight technology' or AWT. Suppose a European machine company has proposed to sell TaylorMade a new...
-
ABC operates a catering company. ABC provides food and servers for parties; the company also rents tables, chairs, linens, chocolate fountains, and tableware, and recommends florists on occasion. The...
-
James Michael schedules autograph signings for football fans and creates posters to sell at each signing. James uses a normal-costing system with two direct cost pools, labor and materials, and one...
-
since they foster goodwill among the general public. Activities like media outreach, influencer marketing, and event participation are all part of public relations. We would create a media strategy...
-
Assume you are a mid-level executive at Automotive Solutions Inc., and you have been assigned to analyze the company's financial statements for 20Y7 and 20Y8 and prepare a report for upper-level...
-
TranscribedText: Gadsen Company's quality cost report is to be based on the following data: Maintenance of test equipment Quality training $ 111,606 Product recalls $ 75,060 Quality circles 49 ,060...
-
BYOM is a family-owned business that designed and manufactures protective, comfortable and reusable face masks. The masks are made with 2 layers of polyester fabric and a polypropylene filter....
-
Ashlee, Hiroki, Kate, and Albee LLC each own a 25 percent interest in Tally Industries LLC, which generates annual gross receipts of over $10 million. Ashlee, Hiroki, and Kate manage the business,...
-
Carl and Jenny adopt a Russian orphan. The adoption takes 2 years and two trips to Russia and is final in 2012. They pay $6,000 in 2011 and $7,500 in 2012 of qualified adoption expenses, and have AGI...
-
Sally hires a maid to work in her home for $250 per month. The maid is 25 years old and not related to Sally. During 2012, the maid worked 10 months for Sally. a. What is the amount of Social...
-
During 2012, Tom sold Sears stock for $10,000. The stock was purchased 4 years ago for $13,000. Tom also sold Ford Motor Company bonds for $35,000. The bonds were purchased 2 months ago for $30,000....
-
A company is scheduling temporary differences for the purpose of computing deferred taxes. The company compared tax basis assets and liabilities with book basis assets and liabilities and accumulated...
-
A company is scheduling its temporary differences for the purpose of computing deferred taxes. The company compared tax basis assets and liabilities with book basis assets and liabilities and...
-
Derive the look-up table for the tangent function in increments of 1 degree. Be sure to take advantage of symmetry.
Study smarter with the SolutionInn App