Prob(>300K) 62.00%
Average $347,249
Initial employees = 1000 1 $333,555
Monthly premium = $100 2 $538,318
Prob of major claim = 0.10 to 0.15 D Uniform 3 -$9,367
12 $824,977
13 $412,693
14 $330,392
15 $890,055
16 $116,103
18 $590,850
19 $393,652
20 $192,881
21 $484,136
22 $252,467
23 $115,872
24 $219,318
25 $315,590
26 -$90,338
27 $250,424
28 -$59,195
29 -$60,173
30 $441,419
31 $124,603
32 $471,183
33 $492,338
34 $401,380
35 $178,737
36 $415,293
38 $248,728
39 $407,100
40 $356,001
41 $217,828
42 $746,330
43 $306,801
44 $503,048
45 $185,285
46 $159,305
47 $388,663
48 $229,145
49 $371,237
50 $293,059
51 $101,549
52 $588,589
53 $423,367
54 $558,015
55 $491,618
56 $341,468
57 $288,893
58 $592,756
59 $461,736
60 $234,588
61 $345,410
62 $327,681
63 $260,737
64 $554,624
65 $591,857
66 $291,478
67 $291,879
Problem 10-51(a)
Prob of minor claim = 0.60 to 0.65 D Uniform 4 $296,051
Major claim mean next year = $5,000 5 $442,899
Std dev of major claim = $1,000 6 $436,137
Minor claim mean next year = $1,500 7 $462,642
72 $623,866
73 $329,691
74 $367,237
75 $408,919
76 -$112,565
79 $401,867
80 $436,096
81 $479,752
82 $386,669
83 $293,638
84 $281,789
86 $310,578
87 $725,553
88 $309,521
89 $608,721
90 $306,055
91 $308,549
92 $328,211
93 $431,011
94 $652,487
95 $246,119
96 $334,159
97 $305,385
98 $100,072
99 $511,861
68 $410,354
69 $185,792
70 $528,231
71 $769,073
Prob(>2M) 88.00%
Average $2,570,236
Initial employees = 1000 1$2,415,819
Monthly premium = $100 2$1,831,359
Prob of major claim = 0.10 to 0.15 D Uniform 3 $2,870,927
12 $2,073,227
Year Employ Major Minor Major avg Major size Minor avg Minor size Cash in Cash out Out pocket 13 $3,939,232
11000 115 613 $5,000.00 $4,590.44 $1,500.00 $1,690.23 $1,200,000 $1,564,015 $364,015 14 $3,849,992
21007 124 639 $5,316.52 $5,573.07 $1,571.97 $1,740.85 $1,208,400 $1,803,462 $595,062 15 $2,767,587
31035 145 653 $5,598.54 $5,075.69 $1,633.19 $1,138.50 $1,242,000 $1,479,415 $237,415 16 $2,657,374
41011 150 630 $5,923.45 $6,210.67 $1,677.56 $1,469.28 $1,213,200 $1,857,247 $644,047 17 $2,442,845
20 $2,692,105
21 $3,135,809
22 $2,526,323
23 $3,469,814
24 $2,798,952
25 $2,224,419
26 $2,741,858
27 $3,018,689
28 $2,463,988
29 $2,552,506
30 $2,572,662
31 $1,651,336
32 $2,077,372
33 $2,806,513
34 $2,480,628
35 $2,893,148
36 $1,984,208
37 $3,404,380
38 $2,868,533
39 $2,929,002
40 $2,592,149
41 $1,859,127
42 $2,242,191
43 $1,929,425
44 $2,698,722
45 $2,605,971
46 $2,594,568
47 $2,483,018
48 $2,801,327
49 $2,162,870
50 $3,196,258
51 $2,929,619
52 $2,302,449
53 $2,587,988
54 $2,221,574
55 $2,521,273
56 $2,441,794
57 $3,184,074
58 $2,474,519
59 $2,223,384
60 $2,659,976
61 $2,780,696
62 $2,241,619
63 $3,178,602
64 $1,131,515
Problem 10-51(b)
Prob of minor claim = 0.60 to 0.65 D Uniform 4 $2,295,864
Major claim mean = $5,000 5$1,891,812
Std dev of major claim = $1,000 6$2,810,221
Minor claim mean = $1,500 7$2,335,845
Std dev of minor claim = $300 8$2,150,799
Change in employees = 0.97 to 1.04 D Uniform 9 $3,969,889
Change in mean of minor claims = 1.02 to 1.05 C Uniform 10 $2,374,755
72 $2,929,552
73 $3,281,048
74 $2,018,730
75 $2,272,030
76 $2,543,907
77 $3,475,204
78 $3,048,463
79 $4,133,536
80 $2,716,927
81 $2,594,012
82 $2,981,431
83 $2,830,480
84 $1,958,044
85 $2,574,434
86 $2,736,553
87 $1,901,378
88 $2,495,584
89 $2,123,634
90 $2,698,024
91 $2,463,544
92 $2,431,202
93 $2,329,192
94 $2,309,274
95 $3,004,602
96 $2,466,659
97 $2,568,817
98 $2,120,960
99 $1,594,162
65 $2,642,840
66 $2,921,422
67 $2,613,763
68 $2,750,730
69 $2,765,821
70 $2,728,895
71 $2,206,196