Unlike in time deposit every time you will pre-terminate an account youare subjected to penalty cross. (exe-tesmnipatian tee) Mortalityand Longevity matter of inverse relationship ofthis two. It canbe a factor of values. Longevity is tantamounttolife expectancy. Higher mortality rate, the higher the premium you should remitto insurance companies. Kasi mas ‘maapgs yung.cash outmo. As you age masmataas.ang policyrate mo. Break-even premium and total.aresent value of total contributions: 30% genes 70% lifestyle ‘May marked up pa yung. mga pinapakita.ng insurance companies. Breakevenis your boundary CATbonds —itcan be usedas an reinsurance Why isit canbe used as reinsurance? Reinsurance — strategy used by insurance companies who tries riskto another Insurance companies by being insured ‘CAT bonds ~are bonds not insurance per se. catastrophic risk riskcreated by nature made. Advantage of this over reinsurance: itwill generate higher value In banking: capital adequacy ratiois being observed. Phils banking system: 15% asl: 10%. Soghilsare ‘atpar. When you are complying with pasel you canhave an opportunity to deal with other banks. Insurance companies: Operating ratio More desirable yung lower operating ratio because itis based on loss and expense wang. loss ratio Ideally, premiums mustbe higher. Reduce loss ratio, or expense ratio. Defer payment of dividends. Increase resource of investment income to arrive ata better operating ratio Expense ratio— Dividends are come from stocks (investment surplus}, premjums.are investedin outlets. So kapag ‘umita wung investment nay un, that is a surplus. So binabalik yun sa.mga policyholder. Kaya kapag