1.
In Manama, ABC Insurance covered 5,000
commercial spaces for 2021. The company estimates
that there is a 2% chance of loss caused by any peril
in the area covered. In addition, per historical data,
350 to 120 buildings experience some form of loss in a
year.
a. What is the expected value of loss?
b. What is the objective risk of the area covered by
ABC?
