|
|
Reinsurance Benefit Example |
|
|
|
Assumptions |
|
New |
Used |
net ceded premium |
|
$550 |
$600 |
claims per contract |
|
$275 |
$350 |
investment income |
|
5% |
5% |
New Vehicle Example |
|
|
Underwriting |
Investment |
Net Income |
|
Premiun |
Claims |
Profit |
Income |
Before Tax |
Year 1 |
$550 |
$20 |
$530 |
$26.50 |
$556.50 |
Year 2 |
$556.50 |
$50 |
$506.50 |
$25.33 |
$531.83 |
Year 3 |
$531.83 |
$75 |
$456.83 |
$22.84 |
$479.67 |
Year 4 |
$479.37 |
$100 |
$379.37 |
$18.97 |
$398.34 |
Year 5 |
$398.34 |
$30 |
$368.34 |
$18.42 |
386.76 |
Used Vehicle Example |
|
|
|
|
|
Year 1 |
$600 |
$25 |
$575 |
$28.75 |
$603.75 |
Year 2 |
$603.75 |
$75 |
$529 |
$26.44 |
$555.19 |
Year 3 |
$555.19 |
$110 |
$445.19 |
$22.26 |
$467.45 |
year 4 |
$467.45 |
$115 |
$352.45 |
$17.62 |
$370.07 |
Year 5 |
$370.07 |
$25 |
$345.07 |
$17.25 |
362.32 |
|
|
|
