Nathan was hired as an actuary with ABC Insurance. Nathan was asked to calculate the annual premium for a new product and to explain his calculations to ABC's director of ratemaking
Nathan calculated the pure premium and presented this value as the final premium. After Nathan's presentation, the director of ratemaking said, "You left out something very important. If we sell coverage at the pure premium rate, we'll be out of business soon." What did Nathan overlook in his calculations?
A) loading for expenses
B) the underwriting cycle
C) seasonality of claims
D) investment income
Answer: A
You might also like to view...
The amount received for each share of stock in excess of par value is_______________
Fill in the blank(s) with correct word
____ is the development of a product that is closely related to one or more products in a firm's existing product line but is designed specifically to meet somewhat different customer needs.
A. Quality modification B. Line extension C. Aesthetic modification D. Feature modification E. Product mix modification
A minor may ratify an agreement while still a minor
Indicate whether the statement is true or false
In which of the following countries would an employee be the least likely to rebut a performance review?
A. Japan B. Saudi Arabia C. United States D. All of the choices are correct.