Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Basic Finance Expert

problem 1:

a) State the benefits and drawbacks of discounting the technical reserves.

b) Company A and Company B have always had exactly similarly portfolio of business, each taking 50% of any risk on a coinsurance basis. In their published accounts, company A sets reserves which are intended exactly to pay for outstanding claims, discounted at the rate of interest the company expects to earn on its assets. Company B’s reserves always comprise a 20% margin for prudence above the amount it believes essential to pay these claims, and it doesn’t discount its reserves.

Describe the differences between the accounts of Company A and Company B, as they would appear to an analyst who was not aware of this information.

problem 2:

a) Describe what is meant by the term under-insurance and why clients engage in same?

b) Penny Sue insures her car for Rs 500,000 for a one-year period. The market value of this car is presently Rs 750,000. The insurance policy has an excess of Rs 15,000. One month after taking the policy, Penny Sue meets with an accident.

i) In the event of a net loss claim, how much would she get from her insurer? 
ii) In the event of a claim estimated at Rs 100,000, how much would she get from her insurer?
iii) In the event of a claim estimated at Rs 15,000, how much would she get from her insurer?
iv) If the policy had a deductible of Rs 15,000 instead of an excess of 15,000, how would this change your answer to parts (i) to (iii) above?

c) List the three ways insurance companies can use to decrease under-insurance and describe their efficiency in practice.

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M96456

Have any Question? 


Related Questions in Basic Finance

What ethical considerations might enter into decisions that

What ethical considerations might enter into decisions that result in cash flow and stock price effects that are valued lower than they might otherwise have been?

1 what is an estoppel why is it used2 what is meant by loss

1. What is an estoppel? Why is it used? 2. What is meant by "loss to lease"? Explain. 3. What are (a) pass through expenses, (b) recoverable expenses, and (c) common area expenses? Give examples of each.

1 demonstrate your understanding of the relationship

1. Demonstrate your understanding of the relationship between logistical capabilities and competencies by tracing the evolution of logistical work to universal competencies. Does this logic have any practical application ...

In addition to the key words you should be able to define

In addition to the key words, you should be able to define each of the following terms: literature search subject words database abstract PsycINFO PsycArticles title introduction method section results section discussion ...

Discussion lets discuss the following based on the assigned

Discussion: Let's discuss the following (based on the assigned and recommneded reading): 1. Is Paying a Premium for Certain Securities Worth the Price? Are portfolio managers willing to pay a premium for securities that ...

Writing assignmentthe capital budgeting decision techniques

Writing Assignment: The capital budgeting decision techniques discussed so far all have strengths and weaknesses; however, they do comprise the most popular rules for valuing projects. On the other hand, valuing an entir ...

Assessment task 1- referencing style apa with in text

Assessment Task 1: - Referencing style: APA with in text referencing - Answer each questions with references and (formulas if required) - showing the right formulae to be used, the steps shown in arriving at the answers, ...

1 describe four reasons why collaborative relationships

1. Describe four reasons why collaborative relationships fail. How can these failures be avoided? 2. Distinguish between reliability and character-based trust. Why is character-based trust critical in collaborative relat ...

1 what factors should an investor consider when trying to

1. What factors should an investor consider when trying to decide whether to dispose of a property that he has owned for several years? 2. What causes the marginal rate of return to change over time? How can the marginal ...

You learn that your inheritance will allow you to receive

You learn that your inheritance will allow you to receive the amount of $5800 at the end of each year for a total of 12 consecutive years. However, because of your young age, these amounts will not begin until the end of ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro

Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen