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Math Help - propration word problems

  1. #1
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    propration word problems

    Hi I am having a hard time understanding how to solveing these kind of problems, I am hoping that if I can get help with one the rest will come with more ease.

    The problem is:

    Three insurance companies agree to jointly insure a cargo ship for $38.6 Million. If insures A,B, and C allocate premiums received and accept the risk in the ratio 3:8:5, respectively:

    A) How will the annual premium of $900,000 be distributed?

    B) What is the maximum claim exposure of each insurer?

    Please Help. Thank you.
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  2. #2
    Super Member craig's Avatar
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    Quote Originally Posted by Crys View Post
    Hi I am having a hard time understanding how to solveing these kind of problems, I am hoping that if I can get help with one the rest will come with more ease.

    The problem is:

    Three insurance companies agree to jointly insure a cargo ship for $38.6 Million. If insures A,B, and C allocate premiums received and accept the risk in the ratio 3:8:5, respectively:

    A) How will the annual premium of $900,000 be distributed?

    B) What is the maximum claim exposure of each insurer?

    Please Help. Thank you.
    I can help you with the first one. The premium's going to be distributed with a ratio of 3:8:5, this means that there are 16 "parts" altogether.

    If you divide $900,000 by 16, you will obviously have \frac{1}{16} of the whole amount. The first insurer will pay \frac{3}{16} or the whole aount, the second \frac{8}{16} etc.

    Does this make sense?
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