How would I solve the following question: An insurance company sells policies for $500. Based on past data, and average of 1 in 50 policy holders will file a $10,000 claim, an average of 1 in 100 policyholders will file a $20,000 claim, and an average of 1 in 250 policyholders will file a $50,000 claim. Find the expected value (to the company) per policy sold. If the company sells 10,000 policies, what is the expected loss or profit?
How would I solve the following question: An insurance company sells policies for $500. Based on...
An insurance policy sells for $600.Based on past data, an average of 1 in 125 policyholders will file a $10,000 claim, an average of 1 in 250 policy holders will file a $40,000 claim, and an average of 1 in 500 policyholders will file a $60,000 claim. Find the expected value (to the company) per policy sold. If the company sells 20,000 policies, what is the expected profit or loss?
An insurance company sells a policy for $1250. Based on past data, an average of 1 in 50 policyholders will win a $10,000 claim on a policy, an average of 1 in 100 policyholders will win a $25,000 claim on a policy, an average of 1 in 200 policyholders will win a $50,000 claim on a policy, and an average of 1 in 500 policyholders will win a $250,000 claim on a policy. a. Find the expected value (to the...
An insurance policy sells for $800. Based on past data, an average of 1 in 125 policyholders will file a $10 comma 000 claim, an average of 1 in 100 policyholders will file a $50 comma 000 claim, and an average of 1 in 400 policyholders will file a $60 comma 000 claim. Find the expected value (to the company) per policy sold. If the company sells 20 comma 000 policies, what is the expected profit or loss?
An insurance policy sells for $800. Based on past data, an averageof 1 in 80 policyholders will file a $10,000 claim, an average of 1in 120 policyholders will file a$20,000 claim , and an average of1 in 200 policyholders will file a $50,000 claim. What is expectedvalue to the company per policy sold?A) $542B) $285C)$288D) $258
Life Insurance: Your company sells life insurance. You charge a 55 year old man $70 for a one year, $100,000 policy. If he dies over the course of the next year you pay out $100,000. If he lives, you keep the $70. Based on historical data (relative frequency approximation) the average 55 year old man has a 0.9998 probability of living another year. (a) What is your expected profit on this policy? $ (b) What is an accurate interpretation of...
Grouper’s Agency sells an insurance policy offered by Capital Insurance Company for a commission of $92 on January 2, 2017. Grouper will receive an additional commission of $10 each year for as long as the policyholder does not cancel the policy. After selling the policy, Grouper does not have any remaining performance obligations. Based on Grouper’s significant experience with these types of policies, it estimates that policyholders on average renew the policy for 4.5 years after the first year before...
Shamrock’s Agency sells an insurance policy offered by Capital Insurance Company for a commission of $109 on January 2, 2017. Shamrock will receive an additional commission of $10 each year for as long as the policyholder does not cancel the policy. After selling the policy, Shamrock does not have any remaining performance obligations. Based on Shamrock’s significant experience with these types of policies, it estimates that policyholders on average renew the policy for 4.5 years after the first year before...
Metlock's Agency sells an insurance policy offered by Capital Insurance Company for a commission of $87 on January 2, 2020. In addition, Metlock will receive an additional commission of $10 each year for as long as the policyholder does not cancel the policy. After selling the policy, Metlock does not have any remaining performance obligations. Based on Metlock's significant experience with these types of policies, it estimates that policyholders on average renew the policy for 4.5 years. It has no...
Exercise 18-8 Ivanhoe’s Agency sells an insurance policy offered by Capital Insurance Company for a commission of $82 on January 2, 2017. Ivanhoe will receive an additional commission of $8 each year for as long as the policyholder does not cancel the policy. After selling the policy, Ivanhoe does not have any remaining performance obligations. Based on Ivanhoe’s significant experience with these types of policies, it estimates that policyholders on average renew the policy for 4.5 years after the first...
Ayayai’s Agency sells an insurance policy offered by Capital Insurance Company for a commission of $82 on January 2, 2017. Ayayai will receive an additional commission of $9 each year for as long as the policyholder does not cancel the policy. After selling the policy, Ayayai does not have any remaining performance obligations. Based on Ayayai’s significant experience with these types of policies, it estimates that policyholders on average renew the policy for 4.5 years after the first year before...