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measure of exposure

A

amaster

Member
Hi I am confused what 'measure of exposure' is?

On pg 35 of chapter 1, it says the measure of exposure for personal accident and health insurance is the person-year...

could someone explain what it means by person-year?:confused:
 
"Measure of exposure" is explained on page 34 of Chapt 1, but you may find the following helpful ...

If you were expressing your premium rates as £X per Y, the Y is the "measure
of exposure". "Person-year" and "member-year" are examples of what this Y
would be. So, for example, if you were using "person-year", the premium
might be expressed as, say, £100 per person covered per year.

In other words, the measure of exposure is the no of people covered times the period of cover in years. To give you some examples:
(1) if one person was covered for one year, the premium charged would be £20
(2) if five people were covered for one year, the premium charged would be
£100
(3) if one person was covered for six months, the premium charged would be £10.

Hope this makes sense.

Regards

Steve
 
i couldn't make head or tail of the explanation of pg34, but your explanation is great... i think i understand it now..

thanks;)
 
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