1. A primary insurer expects claims of 60m and operating costs of 30m. Additionally, the company...

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1. A primary insurer expects claims of 60m and operating costs of 30m. Additionally, the company calculates with a profit of 10m. It cedes 25% to the reinsurer under a pro rata contract (quota share). The reinsurer wants to generate a profit of 10% on the premium volume received. 2. Due to an increased competition, the primary insurer must reduce its original premium by 20%. The pro rata reinsurer's loss and the expected profit remain unchanged. Tasks 1. Calculate the primary insurer's original premium (minimum). 2. For the reinsurer, determine the profit, the loss and the commission to the primary insurer for cases 1 and 2. 1. A primary insurer expects claims of 60m and operating costs of 30m. Additionally, the company calculates with a profit of 10m. It cedes 25% to the reinsurer under a pro rata contract (quota share). The reinsurer wants to generate a profit of 10% on the premium volume received. 2. Due to an increased competition, the primary insurer must reduce its original premium by 20%. The pro rata reinsurer's loss and the expected profit remain unchanged. Tasks 1. Calculate the primary insurer's original premium (minimum). 2. For the reinsurer, determine the profit, the loss and the commission to the primary insurer for cases 1 and 2.

Answer rating: 100% (QA)

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