Model 1: Flat cap high-risk pool

Justwanta6Justwanta6
in GOC.Flood

2 questions:
1. why is participation assumption for low-risk (80%) higher than medium-risk and high-risk homeowners(50%)? shouldnt higher-risk homeowners be assumed to participate more?
2. could you elaborate on how the prem loading factor is used? its defined as 96% of Average Annual Insured Loss, so do we add a loss onto a premium amount to arrive at the final prem?

Comments

  • Staff-T1Staff-T1
    1. Cause the price is much higher for medium and high risk homeowners
    2. Yes, subject to the cap of $500
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