Exam DISC-RM Practice Question 202
Study guide: Exam DISC-RM
An insurer's underwriting policy caps net written premium at 3 times policyholders' surplus. Surplus is $300 million, and it expects to renew $820 million of net written premium next year. New business carries acquisition expenses of 25% of premium, charged against surplus when the business is written. Assuming surplus changes only by that expense, about how much new net premium can the insurer write and still meet the cap?
- A) $20.0 million
- B) $45.7 million
- C) $64.0 million
- D) $80.0 million
Answer this question and see the worked solution