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Which of the Following Statements Are True in the Context

Question 33

Multiple Choice

Which of the following statements are true in the context of general insurance?

A) Loss rates on all general property policies are adversely affected by unexpected increases in inflation.
B) Long-tail losses arise where the peril occurs during a coverage period but a claim is not made until many years later.
C) Long-tail losses arise where the peril occurs during a coverage period but a claim is not made until many years later and loss rates are more predictable on low-severity high-frequency lines than on high-severity low-frequency lines.
D) Loss rates on all general property policies are adversely affected by unexpected increases in inflation; long-tail losses arise where the peril occurs during a coverage period but a claim is not made until many years later and loss rates are more predictable on low-severity high-frequency lines than on high-severity low-frequency lines.

Correct Answer: