If an underwriter takes 15% of a risk and there is a claim of £20,000, how much will they pay?

If an underwriter takes 15% of a risk and there is a claim of £20,000, how much will they pay?

• A. £2,500
• B. £3,000
• C. £1,500
• D. £4,000

Answer: (B)

To determine how much the underwriter will pay in the event of a claim, it is essential to calculate their share of the risk based on the percentage they have taken on. In this scenario, the underwriter has taken on 15% of the risk. First, we need to calculate 15% of the total claim amount. The total claim is £20,000. To find 15% of this amount, you can multiply £20,000 by 0.15 (which is the decimal equivalent of 15%): £20,000 x 0.15 = £3,000. Therefore, the underwriter will pay £3,000, which corresponds to the calculation of their share of the claim based on the risk they assumed. This amount reflects the proportional share of the claim attributable to the underwriter.

To determine how much the underwriter will pay in the event of a claim, it is essential to calculate their share of the risk based on the percentage they have taken on. In this scenario, the underwriter has taken on 15% of the risk.

First, we need to calculate 15% of the total claim amount. The total claim is £20,000. To find 15% of this amount, you can multiply £20,000 by 0.15 (which is the decimal equivalent of 15%):

£20,000 x 0.15 = £3,000.

Therefore, the underwriter will pay £3,000, which corresponds to the calculation of their share of the claim based on the risk they assumed. This amount reflects the proportional share of the claim attributable to the underwriter.