Explain underwriting risk and discuss two risks faced by insurance companie
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Explain underwriting risk and discuss two risks faced by insurance companies.
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- Assume that the company expects sales of each product to decline to 33,000 units next year with no change in unit sales price. Prepare forecasted financial results for next year following the format of the contribution margin income statement as just shown with columns for each of the two products (assume a 32% tax rate). Also, assume that any loss before taxes yields a 32% tax savings. Letter Co. produces and sells two products, T and O. It manufactures these products in separate factories and markets them through different channels. They have no shared costs. This year, the company sold 50,000 units of each product. Sales and costs for each product follow.A private bank's social security mutual fund pays its members a pension, retirement bonus and death insurance to all members in their retirement. This aid fund has 5,000 active members paying premiums and 1,200 members receiving pensions. The average age of active members is 35 and the average age of retired members is 65. The retirement age for all members is set at 60. According to the aid fund contract, a pension of 40,000 TL is given to the retired member every year, a retirement bonus of 500,000 TL to the retired member, and 300,000 TL to his family in the event of the death of any member. Active members make a premium payment of 15,000 TL every year during the working period. This mutual fund uses the premiums it collects and its current cash assets at an annual interest rate of 12%. Calculate the sum of the actuarial obligations of this charity. Calculate the sum of the actuarial revenues of this charity. What should be the reserve of this aid fund?savings banks are permitted to sell life insurance. The approval process consists of underwriting, which includes a review of the application, a medical information bureau check, possible requests for additional medical information and medical exams, and a policy compilation stage, in which the policy pages are generated and sent to the bank for delivery. The ability to deliver approved policies to customers in a timely manner is critical to the profitability of this service to the bank. Using the DCOVA framework you define the variable of interest as the total processing time in days. You collect the data by selecting a random sample of 27 approved policies during a period of one month. You organize the data collected in a worksheet and store them in 73 19 16 64 28 28 31 90 60 56 31 56 22 18 45 48 17 17 17 91 92 63 50 51 69 16 17 a. Compute the mean, median. b. Compute the range, variance, standard deviation, and coefficient of variation. c. What would you tell a customer who enters…
- Federated South Insurance Company has developed a new screening program for selecting new sales agents. Their past experience indicates that 20% of the new agents hired fail to produce the minimum sales in their first year and are dismissed. Their ex- pectation is that this new screening program will reduce the percentage of failed new agents to 15% or less. If that occurs, they would save $1,000,000 in recruiting and training costs each year. At the end of the first year they want to develop an evaluation to determine if the new program is successful. The following questions are an important part of their re- search design.A total of 20 new agents were selected.a. If this group performs at the same level as past groups, what is the probability 17 or more success- fully meet their minimum sales goals in the first year?b. What is the probability 19 or more reach their min- imum sales goals given performance at the same level?c. If the program has actually increased the prob- ability of…Thank you in advance for the help!!! :)There is a 0.9985 probability that a randomly selected 31-year-old male lives through the year. A life insurance company charges $189 for insuring that the male will live through the year. If the male does not survive the year, the policy pays out $80,000 as a death benefit. Complete parts (a) through (c) below. a. From the perspective of the 31-year-old male, what are the monetary values corresponding to the two events of surviving the year and not surviving? The value corresponding to surviving the year is $ The value corresponding to not surviving the year is $ (Type integers or decimals. Do not round.) b. If the 31-year-old male purchases the policy, what is his expected value? The expected value is $ (Round to the nearest cent as needed.) c. Can the insurance company expect to make a profit from many such policies? Why? because the insurance company expects to make an average profit of $ on every 31-year-old male it insures for 1 year. (Round to the nearest cent as needed.)
- The 2020, 2021, and 2022 partial balance sheets for Ottoman Manufacturing Company appear below. 2020 2021 2022 Current assets Cash $20000 $ 16000 $ 14000 Accounts receivable, net 28000 20000 24000 Inventory 22000 30000 28000 Total current assets 70000 66000 66000 Plant & equipment, net 62000 60000 40000 Total assets $132000 $126000 $106000 Net credit sales for Ottoman were $126000 for 2020, $120000 for 2021, and $114000 for 2022, while the cost of goods sold was $84000 for 2020, $82400 for 2021, and $72500 for 2022.What is the average number of days to sell inventory for 2022? (a) 133 days (b) 137 days (c) 141 days (d) 146 days1. Mr. Dela Cruz opens a barbershop business for the month of September. he looks and analyze his accounting records and he found out that in the middle of the month he already had a service income or earned P12,000, but when he checked his expenses by the end of the month it will reach up to P20,000 which includes; salary to his employees, payment for his rent, and water and electricity and other expenses. If Mr. Dela Cruz, wanted to have Php 10,000 profit (limpyo na kita), how much more he needs to earn by the end of the month? Give Mr. Dela Cruz some advice on how he will earn more for the next half of the month. *In a telephone survey of 1000 adults, respondents were asked about the expenses on a management education and relative necessity of some form of financial assistance. The respondents were classified according to whether they currently had a child studying in a school of management and whether they thought that the loan burden for most management students is too high, right amount, or too little. The proportions responding in each category are given below: Too High(A) Right Amount(B) Too Little(C) Child Studying 0.35 0.08 0.01management (D)No Child Studying 0.25 0.20 0.11Management (E) Suppose one respondent is chosen at random from this group. Then (i) What is the probability that the respondent has a child studying management?(ii) Given that the respondent has a child studying management, what is the probability that he/she ranks the loan burden “too…
