Description
1.Discuss methods of setting premium rates in insurance companies (Manual rating, merit rating, judgement rating
2. . Identify any two insurance companies in Kingdom of Saudi Arabia and explain any two insurance products offered by them. Your answer should be based on following points:
- Name of the Company
- Type of Insurance
- Premiums
- Significant features of the insurance product
3. Discuss in detail the various functions involved in “Transaction Cycle” with suitable examples.
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Explanation & Answer
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Running head: DISCUSSION
1
Discussion
Student’s Name
Institutional Affiliation
DISCUSSION
2
Discussion
Insurance Accounting
Question 1
Insurance companies use a number of methods to set up premium rates that should be
used by individuals who buy policies from the company. There are three main methods that are
used including manual rating, judgment rating, and merit rating. Judgment rating is one of the
most commonly used methods. It is applied when factors that are used to determine losses are
not easy to define or cannot be identified as required. An underwriter assesses the loss by rating
each of the exposures independently.
The second method is merit rating. The method is based on assumptions of potential loss
that...