Review for the First Exam

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Review for the First Exam

• Describe Exam
• Review Major Topics
• Provide Study Tips
• and Exam Strategies
• Sample Exam

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First ExamWhen and Where?

• Thursday, February 16, 2006
• 100-220 pm
• 100 Materials Science and Engineering Building
• (1304 West Green Street)

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(No Transcript)
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First Exam

• 20 Questions in Total
• Exam is Worth 30 Points.
• Some True/False or Multiple Choice
• Others Short Answer or Calculations
• Exam is Open Book, Open Note
• Bring Calculator (that you are familiar with
  using) and Auto and Homeowners policies

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Sample Questions

• 1. Management of mutual insurers are immune to a
  hostile takeover by a new owner.
  T F
• 2. The pure premium is the total of expected
  claims and expenses on an insurance policy.
  T F

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Sample Questions

• 3. An Insurance Producer (agent or broker) has
  all of the following duties to an insured except
  which one
• Analyze the clients risks and needs.
• Sell a policy that reasonably suits the insurers
  needs.
• Help with claims.
• Make sure the insured is always getting the
  lowest premium rate available.

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Sample Questions

• Calculate the gross premium using the pure
  premium method based on the following
  information
• Loss frequency 10
• Loss severity 900
• Fixed expenses 100
• Variable expenses 50

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Sample Questions

• How do you calculate the combined ratio?
• A. Loss ratio plus loss adjustment expense ratio
• B. Loss ratio plus expense ratio
• Loss ratio plus expense ratio minus investment
  income ratio

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Topics the Exam Covers

• Overview of Insurance Operations
• (Measurement of Insurer Performance)
• Marketing and Distribution Systems
• Underwriting
• Claims Adjusting
• Ratemaking
• Loss Reserving
• Reinsurance

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Study Tips

• Review Homework Assignments
• If you have not been doing well on the
  assignments, then you probably need to read the
  texts (on reserve in Undergrad Library)
• Review Class Projects (available online)
• Do not memorize material, but know where it is
  located, if you need to look it up
• Have organized notes

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Exam Strategies

• Answer all the questions you can answer without
  using your book and detailed notes first. Then,
  if you have time, use your book and detailed
  notes to help you answer the remaining questions.
• Do not get bogged down on a particular question.
  Skip it and come back, if you have time left.