The question asks for the highest annual loss exposure after adjustment for insurance proceeds. The way to calculate that is to (1) calculate the loss after insurance reimbursement for each situation by multiplying the loss amount by (1 - insurance coverage rate), and (2) divide each loss after reimbursement by the frequency of occurrence in years to calculate the annual loss amount for each.
The question asks for the highest annual loss exposure after adjustment for insurance proceeds. The way to calculate that is to (1) calculate the loss after insurance reimbursement for each situation by multiplying the loss amount by (1 - insurance coverage rate), and (2) divide each loss after reimbursement by the frequency of occurrence in years to calculate the annual loss amount for each, as follows: Frequency of Loss Insurance Loss After Annual Occurrence (years) Amount (% coverage) Ins. Reimb. < Loss I. 1 $ 15,000 85 2,250 $ 2,250 II. 8 75,000 80 15,000 1,875 III. 20 200,000 80 40,000 2,000 IV. 100 400,000 50 200,000 2,000 The highest annual loss is I., with an annual loss exposure of $2,250.
The question asks for the highest annual loss exposure after adjustment for insurance proceeds. The way to calculate that is to (1) calculate the loss after insurance reimbursement for each situation by multiplying the loss amount by (1 - insurance coverage rate), and (2) divide each loss after reimbursement by the frequency of occurrence in years to calculate the annual loss amount for each.
The question asks for the highest annual loss exposure after adjustment for insurance proceeds. The way to calculate that is to (1) calculate the loss after insurance reimbursement for each situation by multiplying the loss amount by (1 - insurance coverage rate), and (2) divide each loss after reimbursement by the frequency of occurrence in years to calculate the annual loss amount for each.
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