Calculate the probability that a randomly chosen policy holder from this portfolio will make a claim during a 12 month period. One of the company’s policyholders has just made a claim (ii) Calculate the probability that the policy holder is younger than 22 years.
An insurance company calculates car insurance company calculates car
insurance premiums based on the age of the policyholder according to three age
groups: Group A consists of drivers younger than 22 years old; Group B consists
of drivers 22—33 years old, and Group C consists of drivers older than 33 years.
Its portfolio consists of 10% Group A policyholders, 38% Group B policyholders
and 52% Group C policyholders.
The probability of a claim in any 12 month period for a policy belonging to Group
A, B or C is 13%, 3% and 2%, respectively.
(i) Calculate the probability that a randomly chosen policy holder from this
portfolio will make a claim during a 12 month period.
One of the company’s policyholders has just made a claim
(ii) Calculate the probability that the policy holder is younger than 22 years.
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