An insurance company’s projected loss ratio is 73%, its commission payments and dividends to policyholders is...

An insurance company’s projected loss ratio is 73%, its commission payments and dividends to policyholders is 12%, and its yield on investments is 6%. If it has a positive (profitable) operating ratio, what can you say about its loss adjustment expense ratio?

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Expert Solution

As the company has a profitable operating ratio, the company's loss adjustment expense ratio is 68% ( 1%+73%+6%-12%).

ekkarill92 answered 1 year ago

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