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Unformatted text preview: 5. The insurer will use the expected loss as a component of the Gross Premium which is based upon the history of the number of liability suits given for ten years. 6. If KIA uses the answer to number 5 to calculate a part of the gross income, KIA would need a relatively low risk charge. Low risk charge is the result from having lots of data, which we’ve been given a history of data for ten years. The more data, the more confidence in the estimate of expected loss and the closer to accuracy....
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- Spring '07
- 27%, 0 27%, 1 21%, 2 24%, 3 28%