1. Review for the First Exam
Describe Exam
Review Major Topics
Provide Study Tips
and Exam Strategies
Sample Exam

2. First Exam When and Where?
Tuesday, February 19, 2002
8:30-9:50 am
If your last name begins: Exam Location:
A-G Education
H-Z 2 Education

3. First Exam 20 Questions in Total Exam is Worth 30 Points.
Some True/False or Multiple Choice
Others Short Answer or Calculations
Exam is Open Book, Open Note
Bring Calculator (that you are familiar with using) and Auto and Homeowners

4. Sample Questions
1. Management of mutual insurers are immune to a hostile takeover by a new owner T F
2. The pure premium is the total of expected claims and expenses on an insurance policy T F

5. Sample Questions
3. Preferred Risk Insurance Company wrote auto insurance for teetotalers. What marketing strategy for competitive positioning is this company following?
A. Market leader
B. Market challenger
C. Market follower
D. Market nicher
E. Market pricer

6. Sample Questions
Calculate the gross premium using the pure premium method based on the following information:
Loss frequency 10%
Loss severity $900
Fixed expenses $100
Variable expenses 50%

7. Sample Questions How do you calculate the combined ratio?
A. Loss ratio plus loss adjustment expense ratio
B. Loss ratio plus expense ratio
Loss ratio plus expense ratio minus investment income ratio

8. Topics the Exam Covers Overview of Insurance Operations
Marketing and Distribution Systems
Underwriting
Claims Adjusting
Ratemaking
Loss Reserving
Reinsurance
Guest Speaker

9. Study Tips Review Homework Assignments
If you have not been doing well on the assignments, then you probably need to read the texts (on reserve in Undergrad Library)
Review Class Projects
Do not memorize material, but know where it is located, if you need to look it up
Have organized notes

10. Exam Strategies
Answer all the questions you can answer without using your book and detailed notes first. Then, if you have time, use your book and detailed notes to help you answer the remaining questions.
Do not get bogged down on a particular question. Skip it and come back, if you have time left.