Asked by Julian Torres on Jul 04, 2024
Verified
Three insurance companies (Axa, Lloyds and AIG) and agree to reinsure a $70 million cargo on an 6: 3: 7 ratio. Given an insurance premium of $4 million, how much would each insurance company have to pay?
Reinsure
A practice where an insurance company transfers a portion of potential risk to another insurer to reduce its overall liability.
Insurance Premium
The amount paid periodically to an insurance company by the policyholder for covering their risk.
- Use ratio and proportion theories to allocate profits and manage investments in partnerships.
Verified Answer
AN
Learning Objectives
- Use ratio and proportion theories to allocate profits and manage investments in partnerships.
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