he National Underwriter Company in Cincinnati, Ohio, publishes property and casu
ID: 3332045 • Letter: H
Question
he National Underwriter Company in Cincinnati, Ohio, publishes property and casualty insurance data. Given here is a portion of the data published. These data include information from the U.S. insurance industry about (1) net income after taxes, (2) dividends to policyholders, (3) net underwriting gain/loss, and (4) premiums earned. Use the data and stepwise regression to predict premiums earned from the other three variables. (Set the alpha level of significance at 0.10.)
Appendix A Statistical Tables
(Round the constant term to three decimal places. Round the other coefficients to 1 decimal place.)
Premiums earned =
+ (
) dividends + (
) net income
PremiumsEarned Net
Income Dividends Underwriting
Gain/Loss 30.2 1.6 .6 .1 47.2 .6 .7 -3.6 92.8 8.4 1.8 -1.5 95.4 7.6 2.0 -4.9 100.4 6.3 2.2 -8.1 104.9 6.3 2.4 -10.8 113.2 2.2 2.3 -18.2 130.3 3.0 2.4 -21.4 161.9 13.5 2.3 -12.8 182.5 14.9 2.9 -5.9 193.3 11.7 2.9 -7.6
Explanation / Answer
From the out put of the given data, the regression equation is as follows
Y^ = 2.331 + 5.9X1 + 26.6 X2 +1.9 X3
Premiums earned = 2.331 + 5.9(Net income) + 26.6(Devidend) - 1.9 (Underwriting)
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