1. How profitable are property and casualty insurance companies? Answer: Property and casualty insurance protects property (houses, cars, boats, and so on) against losses due to accidents, fire, disasters, and other calamities. Property and casualty policies tend to be short-term contracts and, that’s why the subject to frequent renewal is, and one more characteristic feature is the absence of savings component. Property and casualty premiums are based on the probability of sustaining the loss. To estimate the key determinant of the price of an insurance policy, i.e. risks, insurance companies take third-party proceedings that develop models of catastrophe loss probabilities. Based on the numbers form Exhibit 5 of the case we see that
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3. Investing in insurance products: what should Suzanne Feller do?

Answer: According to the case Suzanne Feller actually has 125 million of dollars. The decision to invest or not will depend only on her risk tolerance. In this case we have following situation:

1) Nominal return (annualized) on the investment will range from 13% to 26%. It will depend on the date of the payment. 2) Expected return will range from 15.84% to 25.74%. 3) There is only 1% probability that triggering event will happen. 4) In exhibit 3 we can assume that only hurricanes of 5th category can damage more than 20 billion dollars. 5) In exhibit 1 we see that for the period 1900 – 2004 only once there was only 2 5 category hurricane.
Under these conditions the best decision is to invest.

Another point is that Suzanne Feller has to diversify her portfolio. She has sold her business and she needs to safe her money for future. Under this circumstances decision will totally depend on her risk tolerance. For conservative scenario she can invest only 10% of her funds. For aggressive 50% or more.

4. How large is property and casualty insurance market in Kazakhstan? Who are main players in this market?
Answer: First insurance companies founded in Kazakhstan in 1990. Their organizational structures were developed from co-operatives and associations to joint stock companies. Now there are 41 insurance and reinsurance organizations currently