If the loss ratio on a line of property insurance is 76 percent, the loss adjustment...

If the loss ratio on a line of property insurance is 76 percent, the loss adjustment expense is 13.4 percent, and the ratio of commissions and other acquisitions expenses is 15 percent, is this line profitable?

A. Yes, because the combined ratio is 104.4%

B. No, because the combined ratio is 104.4%

C. No, because the combined ratio is less than 104.4%

D. No, because the combined ratio is less than 104.4%

Solutions

Expert Solution

Ans B. No, because the combined ratio is 104.4%

Combined Ratio = 76 + 13.4 + 15 = 104.4% which is more than 100%

jeff jeffy answered 1 year ago

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