An insurance company uses the model of collective risks in multiple periods by means of a Poisson-compound-Exponential process. The Poisson intensity equals 20, and the mean claim per period is of $140. The company plans to continuosly charge the equivalence premium with a loading percentage of 55%. What should the initial wealth of the company be, so that the probability of ruin is less than 5%?
An insurance company uses the model of collective risks in multiple periods by means of a Poisson-compound-Exponential process. The Poisson intensity equals 20, and the mean claim per period is of $140. The company plans to continuosly charge the equivalence premium with a loading percentage of 55%. What should the initial wealth of the company be, so that the probability of ruin is less than 5%?
Chapter10: Exponential And Logarithmic Functions
Section: Chapter Questions
Problem 442RE: Jerome invests $18,000 at age 17. He hopes the investments will be worth $30,000 when he turns 26....
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Transcribed Image Text:An insurance company uses the model of collective risks in multiple periods by
means of a Poisson-compound-Exponential process. The Poisson intensity equals 20,
and the mean claim per period is of $140. The company plans to continuosly charge
the equivalence premium with a loading percentage of 55%.
What should the initial wealth of the company be, so that the probability of ruin is
less than 5%?
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