Knock out the wrong measures

Exercise and reference answers

Questions

1. 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

2. 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.

Explanation