NIACL Administrative Officer Insurance Penetration and Density — practice questions

Explore 2 free Insurance Penetration and Density questions in NIACL Administrative Officer Insurance. Open each question or exercise to read its content, reference answers and available explanation.

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Insurance Penetration and Density questions and exercises with answers

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Insurance density, as defined by IRDA, is the ratio of:Read the answer and worked solution →Knock out the wrong measuresRead the answer and worked solution →

Worked practice questions

Insurance density, as defined by IRDA, is the ratio of:

Premium to GDP
Claims to premium
Premium to population (per capita premium)
Investments to net worth

Show answer and solution

Correct answer: C. Premium to population (per capita premium)

1. Insurance penetration and insurance density are two distinct measures. 2. Penetration uses GDP; density uses population. 3. Insurance density is calculated as a ratio of premium to population (per capita premium). _Source: IRDA Brochure (irdai.gov.in — official IRDAI publication) — "insurance density is calculated as a ratio of premium to population (per capita premium)"_

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Knock out the wrong measures

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Questions

Question
Three of these ways to measure insurance penetration are wrong.
Choices
1. Item
  Premium as a percent of GDP
  Correct
  Yes
2. Explanation
  That ratio is insurance density, not penetration.
  Item
  Premium divided by population
3. Explanation
  Income per head carries no premium figure at all.
  Item
  GDP divided by population
4. Explanation
  Penetration is set against GDP, never against profit.
  Item
  Premium as a percent of profit
Question
Three of these ways to measure insurance density are wrong.
Choices
1. Item
  Premium per head of population
  Correct
  Yes
2. Explanation
  That is insurance penetration, not insurance density.
  Item
  Premium as a percent of GDP
3. Explanation
  The ratio is upside down; premium comes first.
  Item
  Population divided by premium
4. Explanation
  Density counts premium collected, not claims paid.
  Item
  Claims paid per head

Instructions

Tap the three wrong lines in each set on insurance penetration and density, leaving the true one.

_Source: IRDA Brochure (irdai.gov.in — official IRDAI publication) — "While insurance penetration is measured as a percentage of insurance premium to GDP, insurance density is calculated as a ratio of premium to population (per capita premium)."_

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