▣The Cover Slip Open the partner account
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The Cover Slip / The numbers
One promotion, every figure

The numbers

Every figure on this desk derives from one invented promotion, one invented golf day, one invented book and one invented meter. This page puts them together so a reader can check any of them against the arithmetic that produced it.

Open the partner accountRead a promotion first
Slip stub
The promotion
1,000,000.00 at a 0.351% peril
The premium
4,914.00, or 0.0393 per qualifying account
The book
450,800.00 against 48,000,000 of promises
The meter
6,240,000.00 funded against 6,000,000.00 paid
The clocks
day 11 and day 1, ten days apart
the perilOne stated act that must happen for the prize to be owed - and the estimate of how often it has
the retentionThe largest prize the promoter funds from the promoted product’s own margin, before any cover responds
the coverA schedule of twelve fields that indemnifies the promoter, and is never a reader’s protection
Desk The Cover Slip, cycle 62 · Page the figures in one place · Sample one promotion, one golf day, one book, one meter · Rule every figure is derived, and its arithmetic is shown
Direct answer The desk uses four samples and one rule. The seasonal promotion prices a 0.351% peril at 4,914.00; the golf day prices 1,400 shots at 3,780.00; the insurer’s book turns 322,000 of expected loss into 450,800.00 of premium; and the meter funds 6,240,000.00 against 6,000,000.00 of payouts. No figure is quoted from any real company.

The four samples

0.351%the peril estimate: the act happened in 2 of 570 reference seasons
4,914.00the premium on a 1,000,000.00 prize, being the expected loss plus a 40.0% load
42,000.00the retention, being 10% of one month’s 420,000.00 of gross win
10 daysthe gap between the insurer’s settlement on day 11 and the winner paid on day 1
expected loss 3,510.00 - 71.4% of the premiumload 1,404.00 - 28.6% of the premium

The promotion, priced

From the published prize to the premiumprize 1,000,000.00 peril 0.351% = 2 / 570 expected loss = 3,510.00 load = 1,404.00 (40.0%) premium = 4,914.00 qualifying accounts 125,000 premium per account = 0.0393

The golf day, priced

Fourteen designated holesshots 1,400 (14 days x 100 players) peril per shot 1 in 12,500 = 0.008% expected occurrences = 0.112 prize 25,000.00 expected loss = 2,800.00 premium at a 35.0% load = 3,780.00 insurer margin = 980.00 = 25.9% of the premium cost per shot = 2.70 aggregate limit 100,000 = four wins in fourteen holes

The book, and the meter

Forty promotions and one funded metersum insured 48,000,000 expected loss 322,000 premium income = 450,800 expected profit = 128,800 promises per 1.00 of premium = 106.4 -> 1 in 106.4 one 1,000,000.00 event = -871,200 = 6.8 years of expected profit meter funding rate 1.0% of qualifying stakes monthly qualifying stakes 52,000,000 funded a month = 520,000.00 funded over a year = 6,240,000.00 paid over a year = 6,000,000.00 residual = 240,000.00 = 4.0%

The four samples side by side

prize 1,000,000.00peril 0.351%premium 4,914.00retention 42,000.0023.8 x retention0.0393 per accountgolf 0.112 expectedbook 1 in 106.4meter 4.0% growthclocks 10 days apart

What the four samples agree on

  1. A prize is a liability from the day it is published, and the size of that liability is the prize multiplied by an estimate of the peril.
  2. Moving the liability costs more than the statistic by design: 28.6% of the seasonal premium and 25.9% of the golf premium is the insurer’s expected margin.
  3. The line between keeping and transferring is a retention measured against what the product earns, so the same prize can be kept by one promoter and transferred by another.
  4. The reader’s claim and the promoter’s claim run on different clocks, and only the first one is the reader’s business.
  5. None of the twelve fields on the schedule changes what a winner is owed, which is why the eight checks on the promotion are the whole of the reader’s work.
Everything above is illustrative. The promotion, the golf day, the book and the meter are inventions described on the overview, and every figure is derived from them rather than quoted. An arithmetic that can be re-derived is the point of the page; a number that cannot is not used on this desk.
4 samplesevery figure derivedno real company quotedsee the overview for the samples
The price of the cover

The premium arithmetic in full

The guaranteed prize

The funded case, in full