Question #8
Reading: Reading 11 Analysis of Financial Institutions
PDF File: Reading 11 Analysis of Financial Institutions.pdf
Page: 3
Status: Correct
Correct Answer: B
Question
Compared to a life and health (L&H) insurance company, it is most likely that a property and casualty (P&
Answer Choices:
A. claims will be more predictable
B. policies’ final cost will typically be known within a year of an insured event
C. insurer's:
Explanation
P&C insurers' final cost will usually be known within a year of an insured event occurring.
P&C insurers' policies are usually short term, and P&C claims are more variable and
"lumpier" because they stem from unpredictable events such as accidents.