All of the following are methods that a property and liability insurance company can use to protect against catastrophic losses EXCEPT
A)sale of catastrophe bonds.
B)purchase of common stock.
C)purchase of excess-of-loss reinsurance.
D)quota share reinsurance with a low retention percentage.

Question

Quizplus · Accepted Answer

The purchase of common stock is not a method that a property and liability insurance company can use to protect against catastrophic losses. Common stock is an investment vehicle that generates returns as the company's stock price appreciates or through dividend payments, but it does not directly protect against catastrophic losses. The other options listed - sale of catastrophe bonds, purchase of excess-of-loss reinsurance, and quota share reinsurance with a low retention percentage - are all methods that insurance companies can use to protect against catastrophic losses.

All of the Following Are Methods That a Property and Liability