Shane Dixon
2/27/15
STAT201-024
Insurance Company Shenanigans
Abstract:
The purpose of this experiment was to see if insurance company’s insurance is a
reasonable price per passenger in different size trails. The data collected for this
summary was through an excel simulation. From the data I analyzed the passengers
from the trail of 25 made the trip more then any other trail and yielded the most
profit per passenger for the insurance company. In the larger trail the percent of
passengers that made the trip (92.6%) was closer to the theoretical probabilities of
passengers who made the trip (91%), which the law of large numbers applies here.
My conclusions from this experiment is that it is unfair for insurance companies to
charge $350 dollars for insurance in a group of 25 passengers, but I think it is fair for
them to charge $350 dollars for a large amount of people because there are more
chances for people not to make it on the trip and the insurance company wouldn’t
yield such a large profit. The results I got from this experiment are quite apparent,
out of the 25 passengers in the small trail only one passenger didn’t make it and the
insurance company received $230 dollars per passenger. But from the larger 600
