All of the Following Are Reasons for a Primary Insurer

question 36

Multiple Choice

All of the following are reasons for a primary insurer to use reinsurance EXCEPT

• A)to increase the unearned premium reserve.
• B)to increase underwriting capacity.
• C)to protect against catastrophic losses.
• D)to stabilize profits.

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Definitions:

Price Sensitivity

The degree to which the price of a product affects consumers' purchasing behaviors.

Core Product

The fundamental benefit or solution that a customer receives from a product or service, which defines its primary value.

Commoditization

The process by which goods or services become undifferentiated in the eyes of the consumer, leading to competition primarily on price.

Discrepancy Of Quantity

A mismatch between the amount ordered and the amount delivered or received in a business transaction.