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Insurance Premium Assignment | Homework For You

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Please show work and or explain how you arrived at your answer (mumerical answers with no explanation will not be given full credit)Homework For You

Assume 100 people join an insurance pool (a group of people insured through community rating).

Based on past experience insuring people in this area and based on the age distribution, the insurance company expects a range of anticipated health insurance claims as shown in the table below. Anticipated Health Claims/year/person $800 Number of insured 10 10 1000 10 1200 1400 1600 1800 10 10 10 10 2000 10 2200 10 3000 10 6000

A. Year 1: Customers will buy insurance if their anticipated health claims are greater than the premium. Let’s say in the first year, all 100 people purchase the insurance plan. What is the highest premium the insurance company could have charged for all 100 people to have joined? Get Economics homework help today

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