Explanation:
To calculate the loss ratio, expense ratio, and combined ratio for the insurance company, we'll use the following formulas:
Given the information provided:
$15 million$5 million$25 millionThus,
Loss ratio = $15 million / $25 million = 60%
Expense ratio = $5 million / $25 million = 20%
Combined ratio = 60% + 20% = 80%
Q.5339 An insurance company has made payouts of $15 million and $5 million in expenses over the past year. It received premiums of $25 million over the same period. Calculate the loss ratio, expense ratio, and combined ratio for this insurance company.
A
Loss ratio = 60%, expense ratio = 20%, combined ratio = 80%
B
Loss ratio = 50%, expense ratio = 25%, combined ratio = 75%
C
Loss ratio = 60%, expense ratio = 10%, combined ratio = 80%
D
Loss ratio = 40%, expense ratio = 15%, combined ratio = 55%
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