Financial Risk Manager Part 1

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Explanation:

Loss ratio = payouts / premiums = 60 / 100 = 60%.
Expense ratio = expenses / premiums = 30 / 100 = 30%.
Combined ratio = loss ratio + expense ratio = 60% + 30% = 90%.
Combined ratio after dividends = 90% + dividends / premiums = 90% + (15 / 100) = 105%.
Operating ratio = 105% – investment income / premiums = 105% – (20 / 100) = 85%.

(Book 3, Module 28.1, LO 28.f)

Explanation:

Loss ratio = payouts / premiums = 60 / 100 = 60%.
Expense ratio = expenses / premiums = 30 / 100 = 30%.
Combined ratio = loss ratio + expense ratio = 60% + 30% = 90%.
Combined ratio after dividends = 90% + dividends / premiums = 90% + (15 / 100) = 105%.
Operating ratio = 105% – investment income / premiums = 105% – (20 / 100) = 85%.

(Book 3, Module 28.1, LO 28.f)

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UAnonymous

Last updated: June 29, 2026 at 12:47

The loss ratio is 50%.

The expense ratio is 25%.

The combined ratio is greater than 100%.

The operating ratio is less than the combined ratio.