Chapter 22 - Expenses

Question 1

Types of expenses

Answer 1

Fixed vs variable

Direct vs indirect

Question 2

Expense allocation

Answer 2

Class of business:
Direct expenses staff timesheets
Indirect expenses several ways

Function:
Initial expenses
Maintenance: renewal, investment
Termination

Question 3

Expense allocation

Answer 3

Percentage of premium
Percentage of funds under management
Fixed amount per contract
Fixed amount per claim or Percentage of claim amount
Combination

Question 4

Adjustment to pricing expense loadings

Answer 4

Cross subsidies
Inflation
Competition