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In one year 2, 100 malpractice claims were filed with insurance compan
[#permalink]
Updated on: 14 Aug 2024, 02:57
Updated on: 14 Aug 2024, 02:57
1
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Expert Reply
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A
B
C
D
E
Difficulty:
35%
(medium)
Question Stats:
74% (01:53) correct
26%
(01:51)
wrong
based on 520
sessions
In one year 2,100 malpractice claims were filed with insurance company X and of these 1/4 resulted in a financial settlement. Of those resulting in a financial settlement of less than $400,000, what was the average payment per claim?
(1) Company X paid a total of 24.5 million dollars to the claimants.
(2) Only 5 claims resulted in payments of $400,000 or more.
ID: 700133
DS21201
(1) Company X paid a total of 24.5 million dollars to the claimants.
(2) Only 5 claims resulted in payments of $400,000 or more.
ID: 700133
DS21201
Joined: 01 Nov 2017
Posts: 106
Given Kudos: 333
Location: India
Concentration: Finance, Leadership
Schools: ISB '21
GMAT 1: 690 Q49 V36
GPA: 4
WE:Web Development (Consulting)
Re: In one year 2, 100 malpractice claims were filed with insurance compan
[#permalink]
23 May 2020, 13:31
23 May 2020, 13:31
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Answer: Option E
Solution
No. of claims: 2100
Resulting in Financial settlements: (1/4) * 2100 = 525
Question: Average of settled claims less than 400,000?
Values needed: Number of those claims and the total sum of those claims
Options:
(1) Company X paid a total of 24.5 million dollars to the claimants.
=> Insufficient. No info on how much for less than 400, 000$ claims and how much for other
(2) Only 5 claims resulted in payments of $400,000 or more.
=> Insufficient. Less than 400,000 $ claims are (525 - 5) = 520 but no info on total amount with these claims.
Options (1) & (2):
=> Insufficient. By combining as well, we don't have any information on what is the total value of settlements claims less
than 400,000 $.
Solution
No. of claims: 2100
Resulting in Financial settlements: (1/4) * 2100 = 525
Question: Average of settled claims less than 400,000?
Values needed: Number of those claims and the total sum of those claims
Options:
(1) Company X paid a total of 24.5 million dollars to the claimants.
=> Insufficient. No info on how much for less than 400, 000$ claims and how much for other
(2) Only 5 claims resulted in payments of $400,000 or more.
=> Insufficient. Less than 400,000 $ claims are (525 - 5) = 520 but no info on total amount with these claims.
Options (1) & (2):
=> Insufficient. By combining as well, we don't have any information on what is the total value of settlements claims less
than 400,000 $.
Re: In one year 2, 100 malpractice claims were filed with insurance compan
[#permalink]
28 Nov 2020, 12:19
28 Nov 2020, 12:19
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2,100 malpractice claims were filed
\(2,100(0.25) = 525 \) claims resulted in a financial settlement
Of the 525 claims that resulted in a settlement of < $400,000, what was the average?
We need to know the number of claims under $400,000 and the the total amount paid out by Company X for claims less than $400,000.
(1) We don't know how what portion is from the settlements under $400,000. INSUFFICIENT.
(2) Clearly insufficient.
(1&2) Combined, we're told 2,100 claims were filed and only 5 claims resulted in payments of over $400,000.
However, we don't know the value of those 5 claims. Those 5 claims could each be $4 million dollars or they could be $400,000. INSUFFICIENT.
Answer is E.
\(2,100(0.25) = 525 \) claims resulted in a financial settlement
Of the 525 claims that resulted in a settlement of < $400,000, what was the average?
We need to know the number of claims under $400,000 and the the total amount paid out by Company X for claims less than $400,000.
(1) We don't know how what portion is from the settlements under $400,000. INSUFFICIENT.
(2) Clearly insufficient.
(1&2) Combined, we're told 2,100 claims were filed and only 5 claims resulted in payments of over $400,000.
However, we don't know the value of those 5 claims. Those 5 claims could each be $4 million dollars or they could be $400,000. INSUFFICIENT.
Answer is E.
