Revision as of 22:01, 13 May 2023 by Admin (Created page with "'''Key: D''' The retained loss is 100,000 + 0.15(100,000) + 0.10(100,000) + 0.05(150,000) = 132,500. {{soacopyright | 2023}}")
Exercise
May 13'23
A primary insurance company has a 100,000 retention limit. The company purchases a catastrophe reinsurance treaty, which provides the following coverage
Layer 1: 85% of 100,000 excess of 100,000
Layer 2: 90% of 100,000 excess of 200,000
Layer 3: 95% of 300,000 excess of 300,000
The primary insurance company experiences a catastrophe loss of 450,000.
Calculate the total loss retained by the primary insurance company.