In this assignment you will assume the role of a senior analyst hired by a fictitious company, Premium Acceptance, a midsized property insurance carrier. Premium Acceptance is performing well with respect to several key performance indicators, including policies in force, policy retention, and new business counts.
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However, the company’s bottom line has been hindered due to poor loss ratios. A loss ratio is simply the difference between the ratios of claims paid by an insurance carrier and the ratio of premiums paid. The board of directors depends on the ability to forecast loss ratios, which in turn enables them to forecast profitability metrics to the shareholders. The organization will now consider implementing the use of statistics for measuring risks.
For this assignment, you will write a minimum three-page paper (not including APA title or references pages). In this paper, please address the following:
- Provide a general overview of statistics and how they support the risk assessment process.
- Discuss at least two statistical tools that can be employed to measure risk.
- Convey which tool best serves the company’s purposes and explain why it is.
- What are the ramifications of the organization electing not to use statistics in this process?
- Be sure to include an introductory paragraph at the beginning and a concluding paragraph at the end of your paper.
- Because your paper is required to be at least three pages in length, you should use subject headings to label your paper as appropriate.
- Be sure to include APA citations to support your assertions and to inform your paper.
- You will need to include an APA formatted reference page with this paper (separate from the body of your paper).
- Be sure to proofread your paper to ensure that is free from all grammar and spelling errors.