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Which type of insurance company generally takes on the greater risks: a life insurance company or a property and casualty insurance company?
The risks protected against by casualty and property companies are much less predictable than are the risks insured by life insurance companies. Fires, floods, Hurricanes and trial judgments are all much more difficult to predict than the number of sixty-year-old females who will die this year among a large number in this risk class. This signifies that casualty and property insurance companies must keep more liquid assets than do life insurance companies.
Blossom Lawn expects to have total sales next year totaling $15,000,000 and the firm pays taxes at 35% and will owe $300,000 in interest expenses.
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