{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

ct010s11 - UNSW ACTL1001 Actuarial Studies and Commerce...

Info icon This preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
UNSW ACTL1001 Actuarial Studies and Commerce Sample Solutions Exercises 11 Exercise 1 The unearned premium provision at the end of the financial year 31 December will be Quarter Premiums received Unearned Premium March 60,700 1 8 × 60700 = 7587 . 5 June 300,100 3 8 × 300100 = 112537 . 5 September 50,670 5 8 × 50670 = 31668 . 75 December 120,980 7 8 × 120980 = 105857 . 5 giving an unearned premium provision of $ 257,651.25. Exercise 2 Profit is Premiums + Investment Income - Claims -Expenses- Increase in Policy Liability where Policy liability = unearned premium provision + outstanding claims provision so that Policy liability XX-1 = 5,090.4 Policy liability XX = 5 , 500 . 3 and profit equals 2 , 829 . 8 + 148 . 5 - 1 , 784 . 2 - 1 , 818 . 3 - (5 , 500 . 3 - 5090 . 4) = - 1 , 034 . 1 (a loss). We also have Earned premium = 2,829.8+1,038.9- 1 , 069 . 4 = 2 , 799 . 3 and Incurred Claims = 1,784.2+4,430.9-4,051.5 = 2 , 163 . 6 Now profit also equals Earned remiums + Investment Income - Incurred Claims -Expenses 1
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
2 , 799 . 3 + 148 . 5 - 2 , 163 . 6 - 1 , 818 . 3 = - 1 , 034 . 1 (a loss) The expense ratio is expenses earned premium = 1 , 818 . 3 2 , 799 . 3 = 0 . 65 or 65% and the loss ratio is incurred claims earned premiums = 2 , 163 . 6 2 , 799 . 3 = 0 . 77
Image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern