A life insurance company has provided the following data on one of its conventional without profits protection products: Business in-force at year end Number of policies Total sum assured Total annual premium 2012 10,014 100,000,129 10,000,121 2013 11,255 122,550,011 13,755,005 (i) Comment on whether the data appears to be accurate. Solutions: The average sum assured at YE 2012 = 9,986 and at YE 2013 = 10,888. The average premium at YE 2012 = 999 and at YE 2013 = 1,222. As at YE 2012 the premium to sum assured ratio is 0.1 and as at YE 2013 this ratio is 0.11. All of the above look to be material increases and warrant further investigation. may I ask how do we get 9986, 10888, 999 and 1222
Divide the number of policies or total sum assured by the business in force at their respective year end - when rounded to the nearest whole number, you get the average sum assured/premium as suggested in the solutions