11/7/2020 PGDM 2019.

21 TREMESTER IV INSURANCE ACCOUNTS

PGDM 2019.21 TREMESTER IV

INSURANCE ACCOUNTS


Points: -/25

YOUR ROLL NUMBER *

192139

YOUR NAME *

Vipul Kumar

YOUR EMAIL ID *

vipul.ymca78@gmail.com

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11/7/2020 PGDM 2019.21 TREMESTER IV INSURANCE ACCOUNTS

Calculate the Operating Profit or Loss that will be transferred from Revenue
Account to Profit and Loss Account of Nikhil General Insurance as at the end
of the year. Claims Outstanding Figures include IBNR.
(-/25 Points)

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11/7/2020 PGDM 2019.21 TREMESTER IV INSURANCE ACCOUNTS

Net Premium = Gross Premium + Reinsurance accepted – Reinsurance ceded

= 3500+ 300 – 1050 = 2750 Cr

Net Eraned Premium = Unearned Premium Reserve @ 50% + Reserve for unexpired risks at the
beginning of the year = 1375+ 1140 = 2515 Cr

Gross Incurred Claims = Claims paid during the year + Claims o/s at the end of the year -
Claims o/s at the beginning of the year
= 2100 + 4700 – 4400 = 2400 Cr

Incurred Claims on reinsurance accepted = Claims paid + claims o/s year end - claims o/s year
beg.
= 220 +270 -300 = 190 Cr

Incurred Claims on reinsurance ceded = Claims paid + claims o/s year end - claims o/s year
beg.
= 650 +770 -670 = 750 Cr

Net Incurred Claims = Gross IC + Incurred Claims on reinsurance accepted – Incurred claims in
the reinsurance ceded
= 2400 + 190 – 750 = 1840Cr

Net commission = c/m paid wrt to direct business + c/m paid wrt to reinsuranc accepted – c/m
paid wrt to reinsurance accepted
= 260 + 80 – 170 = 170 Cr

Underwriting Profit = (Net earned Premium) – (Net Incurred Cliams + N. C. + Op exp)

Underwriting Profir = 2515 - (1840 + 170 + 720 ) = - 215 Cr. (Underwriting Loss)
Operating Profit = Underwriting Profit + Inv. Inc.
Operatign Profit = -215 + 700 = 484 Cr (Profit)

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