Calculations interview questions for insurance roles
89 questions from core to advanced: concepts, calculations, whiteboard diagrams, SQL, scenarios and behavioural. Answer out loud first, then reveal the model answer and example. Mark each one practised when you can answer it without looking.
Practised 0 of 89
Work out the premium: IDV ₹5,95,000, policy OD rate 1.477%, NCB 25%, 1,197 cc car, CPA ₹330, zero depreciation 0.35% of IDV, roadside assistance ₹199.
- Basic OD = 5,95,000 × 1.477% = ₹8,790.
- NCB 25% = −₹2,198, so OD = ₹6,593.
- TP for 1,000–1,500 cc = ₹3,416; CPA ₹330.
- Add-ons = 2,083 + 199 = ₹2,282.
- Net ₹12,620 + GST 18% ₹2,272 = ₹14,892.
Room-rent limit ₹5,000 a day; the patient chose an ₹8,000 room for 4 days. Bill: room ₹32,000, other room-linked charges ₹88,000, medicines ₹80,000. What does the insurer pay?
- Proportion = 5,000 ÷ 8,000 = 62.5%.
- Room: 4 × ₹5,000 = ₹20,000.
- Other room-linked charges: 88,000 × 62.5% = ₹55,000.
- Medicines are not cut: ₹80,000.
- Insurer pays ₹1,55,000; customer pays ₹45,000 of a ₹2,00,000 bill.
ExampleLesson for customers and BAs: a ₹3,000 room upgrade cost this patient ₹45,000.Base policy ₹5 lakh plus either a top-up or a super top-up of ₹10 lakh with a ₹5 lakh deductible. Claims in the year: ₹3 lakh, ₹4 lakh, ₹6 lakh. Who pays what?
- Base pays ₹3 lakh, then ₹2 lakh of the second claim; it is now exhausted.
- Top-up (deductible per claim): claim 2 is below ₹5 lakh, so it pays nothing; claim 3 pays ₹1 lakh. Customer bears ₹7 lakh.
- Super top-up (deductible on the year's total): the total passed ₹5 lakh during claim 2, so it pays ₹2 lakh of claim 2 and all ₹6 lakh of claim 3. Customer bears nothing.
- That is why super top-ups are usually better value.
Earned premium ₹500 crore, claims paid ₹320 crore, outstanding claim reserves up from ₹100 crore to ₹140 crore, expenses ₹160 crore. Find the loss, expense and combined ratios.
- Claims incurred = paid + change in reserves = 320 + 40 = ₹360 crore.
- Loss ratio = 360 ÷ 500 = 72%.
- Expense ratio = 160 ÷ 500 = 32%.
- Combined ratio = 104%: an underwriting loss of ₹20 crore, covered only if investment income exceeds it.
A ₹50 crore fire risk has a 40% quota share. The insurer's retained share is protected by excess of loss of ₹20 crore xs ₹5 crore. A ₹30 crore loss occurs. Who pays?
- Quota share reinsurer: 40% × 30 = ₹12 crore.
- Insurer's retained share: ₹18 crore.
- Excess of loss pays above ₹5 crore: 18 − 5 = ₹13 crore (within the ₹20 crore limit).
- Insurer's net cost: ₹5 crore.
A customer had 35% NCB, renewed 120 days late, then had a claim-free year, then a claim. What NCB applies at each renewal?
- Renewed 120 days late: more than 90 days, so NCB drops to 0%.
- After the next claim-free year: 20%.
- After the year with a claim: 0% again (unless they bought NCB protection).
A car has an ex-showroom price of ₹12 lakh, is 40 months old and the repair estimate is ₹6 lakh. Is it a total loss?
- 40 months is 3–4 years: 40% depreciation, IDV = ₹7,20,000.
- 75% of IDV = ₹5,40,000.
- The ₹6 lakh estimate is higher, so it is a constructive total loss.
- Insurer pays the IDV less the compulsory deductible and takes the salvage (or pays less if the customer keeps the wreck).
A ₹36,500 annual policy starts on 1 January 2026. How much is earned by 31 March 2026, and what is the unearned premium reserve?
- Days of cover given: 31 + 28 + 31 = 90 of 365.
- Earned = 36,500 × 90 ÷ 365 = ₹9,000.
- Unearned premium reserve = ₹27,500.