Dear Snowy, Let's consider the business that was written in January 2009 first. From this business, the company will be exposed to: 1.5 units of risk in January 2009 1.5 units of risk in February 2009 1.5 units of risk in March 2009 1 unit of risk in April etc, ... ... up to 1.5 units of risk in December 2009. Similarly, for business written in February, the number of units of risk that the company will be exposed to is: 1.5 in February 1.5 in March 1 in May etc, ... ... up to 1.5 units in January 2010. We can carry out the same calculation for business written in every month of 2009. I have done this for you in the attached document, but you should try to work it out for yourself before you look at it. The bottom of the document adds up the total units of risk for each calendar month, from business written in each underwriting month. We can see that this gives you the figures you were querying. I hope this helps, Kind regards, Katherine.
