The Business of Insurance Quiz

Question 1 of 4

1. Question

Is this statement true or false? “The premium charged for each risk should be equal or proportionate to the chance of loss”

1. True

2. False

Correct

Incorrect
Question 2 of 4

2. Question

Using the bucket analogy, what happens if the inputs (premiums, investments) are less than the outputs (claims, operating expenses)?

1. The insurance company is not profitable.

2. The insurance company is profitable.

Correct

Incorrect
Question 3 of 4

3. Question

When the economic climate is calm and there’s a lot of competition in the marketplace, companies may want to…

1. Increase premiums

2. Decrease premiums

Correct

Incorrect
Question 4 of 4

4. Question

What tends to happen during a tight economy?

1. There is often an increase in the frequency of claims.

2. There is often a decrease in the frequency of claims.

Correct

Incorrect