520 Final Exam -2024

When using prospective loss costs supplied by advisory organizations to produce rates, each insurer must apply its own {Ans: loss cost multiplier}morale hazard {Ans: a condition of carelessness or indifference that increases the frequency or severity of loss}What is affinity marketing {Ans: group marketing that targets various groups based on profession, association, interests, hobbies, and attitudes.}What are the underwriting profitability functions of an insurer? {Ans: guarding against adverse selection, ensuring adequate policyholders' surplus, and enforcing underwriting guidelines.}Which one of the following is determined by a company's underwriting policy {Ans: Composition of the insurer's book of business}What is the formula for the GAAP method for determining return on equity {Ans: Net Income / Average Owners Equity}