B C D E F G 2 You are the CRO of Terp P&C Insurance Co. and have a specialty Auto insurance subsidiary of 3 the company. Your portfolio is concentrated in a 4 state area that is exposed to tornado activity. 4 You have been provided with the wind speeds (WS) and probabilities of each type of tornado (on the EF scale) 5 The relationship of annual damages ($D) in dollars per insured auto is given as the following: 5 7 $D = .0011*exp(ln(WS)*3.3) 9 0 EFO 1 EF1 2 EF2 3 EF3 4 EF4 5 EF5 6 Wind Speed Annual Prob 30 85.00% 85 5.00% 110 3.25% 135 2.75% 165 2.50% 200 1.50% 7 8 A. Create a table showing the annual damage for each tornado scenario and AAL for an individual policyholder 9 0 1 2 B. If your G&A cost is $100 per policy, the company's cost of capital is 12% and the deductible is $500 3 What is the annual premium that should be charged? I H J K