2. An insurance company estimates that for each individual, the probability of a car accident occurring...
2. An insurance company estimates that for each individual, the probability of a car accident occurring in a given year is 0.02. If an accident occurs, the amount of damage to the car is uniformly distributed on [2000, 4000]. What is the average loss that an insured experiences in a year? What is the variance?
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2. An insurance company estimates that for each individual, the
probability of a car accident occurring...
A car insurance company offers three types of insurance: liability, collision and comprehensive. The car insurance...
A car insurance company offers three types of insurance: liability, collision and comprehensive. The car insurance company has the following information on its customers insuring only one car: (i) 70% of the cars are insured under the liability. (i) There are twice as many comprehensive policies as collision policies. (ii) A comprehensive insured car is three times as likely to be involved in an accident in a given year as a liability insured car. (iv) A collision insured car is...
2. An insurance company supposes that each person has a accident parameter and that the yearly...
2. An insurance company supposes that each person has a accident parameter and that the yearly number of accidents of someone whose accident parameter is is Poisson distributed with mean 1. They also suppose that the parameter value of a newly insured person can be assumed to be the value of an exponential random variable with parameter s. (a) If a newly insured person has n accidents in her first year, find the conditional density of her accident parameter. (b)...
2. The probability that James is involved in a car accident is 0.3 and the probability...
2. The probability that James is involved in a car accident is 0.3 and the probability that he is not in a car accident is 0.7. The value of his car is $10000, which is lost if he is in an accident. That is, his wealth is $20000 if he does not have an accident and $10000 if he is involved in an accident. James utility function is U(M)-10-1000/Mo, where M is his wealth. (a) What are the expected value...
A policyholder has a two-year auto insurance for his new car. Let X be the number of accidents th...
A policyholder has a two-year auto insurance for his new car. Let X be the number of accidents that the policyholder experiences in one year. You are given: Pr[X = 0] = 0.9 Pr[X = 1] = 0.08 Pr[X = 2] = 0.02 The number of accidents that the policyholder experiences in each year is independent. Given that the policyholder experiences exactly 2 accidents in two years, find the probability that the policyholder experiences at least one accident in each...
show all work Problem 5 An insurance company issues a policy on a car under the...
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Problem 5 An insurance company issues a policy on a car under the following conditions: (1) The replacement cost of $37,000 will be paid for a total loss. (ii) If it is not a total loss, but the damage is more than $11,000, then only $ 10,500 will be paid. (iii) Nothing will be paid for damage costing $11,000 or less and, (iv) Nothing will be paid out if there is no damage. The company estimates, based...
Romeo and Juliet decide to start a new business venture: JR Insurance Ltd. to insure people...
Romeo and Juliet decide to start a new business venture: JR Insurance Ltd. to insure people against damages from car accidents. They assume that car accidents resulting in claims occur according to a nonhomogeneous Poisson process at rate ? ? = 2? per month. As almost any other insurance policy; there is a stochastic delay between the time each accident occurs and the payment is made. These claims not yet paid are said to be “outstanding claims.” Suppose that these...
2) [2096] Penguin auto insurance estimates that there exists a .23 probability that 16-year-old d...
2) [2096] Penguin auto insurance estimates that there exists a .23 probability that 16-year-old driving a red, two-door, 8-cylinder engine car will get into an accident that would cost the maximum amount in liability of $100,000. The annual premium for such a policy is $2,500. Q1) What is the expected profit per year for Penguin on such a policy? Q2) What profit must Penguin charge in order to make a profit on each policy? 3.120%) Recent research at Viking auto...
Assignment Question(s):(Marks5) Q1. Review the information about types of insurance and identify that in each of...
Assignment Question(s):(Marks5) Q1. Review the information about types of insurance and identify that in each of the following cases, which type of insurance will be applicable for insured: (1 Mark) a. Insurance that covers movable property. An example of such kind of property could be a tourist's personal property. b. Insurance that covers the loss that arises due to sickness and by visiting to a doctor. c. Insurance covers the risk of insured arises because of an accident when he...
Marika Katz bought a new Blazer and insured it with only compulsory insurance 10/20/5. Driving up to her summer home one evening, Marika hit a parked car and injured the couple inside. Marika’s car ha...
Marika Katz bought a new Blazer and insured it with only compulsory insurance 10/20/5. Driving up to her summer home one evening, Marika hit a parked car and injured the couple inside. Marika’s car had damage of $9,800, and the car she struck had damage of $8,100. After a lengthy court suit, the couple struck were awarded personal injury judgments of $15,700 and $6,700, respectively. a. What will the insurance company pay for this accident? Amount paid $ b. What...
7. In an insurance market there are three indistinguishable types of potential clients: of low medium...
7. In an insurance market there are three indistinguishable types of potential clients: of low medium and high risk. Each of these groups is composed of 1000 persons. The probability of an accident (loss) in each of these groups amounts to 1%, 2%, and30-respectively. If a loss occurs, the resulting damage is 100004근ety. The maximum amount that a client from a given group will pay for insurance is 1500 zloty, 2900 zloty, and 3500 zloty respectively. What average (i.e. expected)...
A car insurance company offers three types of insurance: liability, collision and comprehensive. The car insurance company has the following information on its customers insuring only one car: (i) 70% of the cars are insured under the liability. (i) There are twice as many comprehensive policies as collision policies. (ii) A comprehensive insured car is three times as likely to be involved in an accident in a given year as a liability insured car. (iv) A collision insured car is...
2. An insurance company supposes that each person has a accident parameter and that the yearly number of accidents of someone whose accident parameter is is Poisson distributed with mean 1. They also suppose that the parameter value of a newly insured person can be assumed to be the value of an exponential random variable with parameter s. (a) If a newly insured person has n accidents in her first year, find the conditional density of her accident parameter. (b)...
2. The probability that James is involved in a car accident is 0.3 and the probability that he is not in a car accident is 0.7. The value of his car is $10000, which is lost if he is in an accident. That is, his wealth is $20000 if he does not have an accident and $10000 if he is involved in an accident. James utility function is U(M)-10-1000/Mo, where M is his wealth. (a) What are the expected value...
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Problem 5 An insurance company issues a policy on a car under the following conditions: (1) The replacement cost of $37,000 will be paid for a total loss. (ii) If it is not a total loss, but the damage is more than $11,000, then only $ 10,500 will be paid. (iii) Nothing will be paid for damage costing $11,000 or less and, (iv) Nothing will be paid out if there is no damage. The company estimates, based...
2) [2096] Penguin auto insurance estimates that there exists a .23 probability that 16-year-old driving a red, two-door, 8-cylinder engine car will get into an accident that would cost the maximum amount in liability of $100,000. The annual premium for such a policy is $2,500. Q1) What is the expected profit per year for Penguin on such a policy? Q2) What profit must Penguin charge in order to make a profit on each policy? 3.120%) Recent research at Viking auto...
7. In an insurance market there are three indistinguishable types of potential clients: of low medium and high risk. Each of these groups is composed of 1000 persons. The probability of an accident (loss) in each of these groups amounts to 1%, 2%, and30-respectively. If a loss occurs, the resulting damage is 100004근ety. The maximum amount that a client from a given group will pay for insurance is 1500 zloty, 2900 zloty, and 3500 zloty respectively. What average (i.e. expected)...
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