If an underwriter takes 15% of a risk and there is a claim of £20,000, how much will they pay?

To determine how much the underwriter will pay in the event of a claim, it is essential to calculate their share of the risk based on the percentage they have taken on. In this scenario, the underwriter has taken on 15% of the risk.

First, we need to calculate 15% of the total claim amount. The total claim is £20,000. To find 15% of this amount, you can multiply £20,000 by 0.15 (which is the decimal equivalent of 15%):

£20,000 x 0.15 = £3,000.

Therefore, the underwriter will pay £3,000, which corresponds to the calculation of their share of the claim based on the risk they assumed. This amount reflects the proportional share of the claim attributable to the underwriter.