Principles of Risk Management and Insurance 13th Edition by George Rejda,Michael McNamara

Exercise 3

A large casualty insurer writes a substantial amount of private passenger auto insurance. An actuary analyzed claims data for a specific class of drivers for a recent one-year policy period. The claims data showed that the insurer paid out $30 million for incurred losses and loss-adjustment expenses for each 100,000 cars insured for one year. Based on the pure premium method, calculate the pure premium.