The company should charge/average premium: At
the very least, the amount that the company should charge as an average premium
for each person in the 16-21 group is $1100.
In this way, it will not lose or gain money on its claims costs. It’s quite probable that the company will
charge more, moving from break-even to profit.
Company charge of $50 profit:Well, what have you done on this? You can't just post a problem and expect people to do it for you! If "occurence A" happens to 2 out of every 100 customers, and the insurance company pays out $1000 for every occurence, what is the expected payout? What is the expected payout per policy? Now add costs and profit to that.
Hope this helped.
