Odomirok.15-P S2019 Q11 a.
I wrote one reason as " Insurer #1 has increased ultimate claims along each diagonal but it hasn't earned more business. This could imply insurer #1 might write more high risk business. However, it hasn't purchased more reinsurance protection. Thus, the regulator might be more concern about insurer #1". Do you think the grader would accept this reason? Thanks!
Comments
Your answer is in line with the ultimate loss ratio answers.
"Insurer #1 has increased ultimate claims along each diagonal but it hasn't earned more business."
--> This is an (unusual) way of saying their loss ratios are increasing.
The remedy for writing more high-risk business is not always reinsurance. It should be resolved in pricing.