You have been asked by your boss to determine the profitability of Insurance Company. To do so, calculate these ratios: loss ratio, expense ratio, combined ratio, investment income ratio, and overall operating ratio. İnsurance Company provided you with this information: Item Incurred underwriting expenses Incurred losses and loss adjustment expenses Net written premiums Earned premiums Net investment income Amount $7,500,000 37,000,000 22,500,000 21,500,000 2,050,000 Is Insurance Company profitable? How did you come to this conclusion?
You have been asked by your boss to determine the profitability of Insurance Company. To do so, calculate these ratios: loss ratio, expense ratio, combined ratio, investment income ratio, and overall operating ratio. İnsurance Company provided you with this information: Item Incurred underwriting expenses Incurred losses and loss adjustment expenses Net written premiums Earned premiums Net investment income Amount $7,500,000 37,000,000 22,500,000 21,500,000 2,050,000 Is Insurance Company profitable? How did you come to this conclusion?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:**Analyzing Insurer Financial Ratio Calculations—Activities 1**
**Week 3 Assignment 1 Case 1—Analyzing a Property-Casualty Insurer’s Profitability**
You have been asked by your boss to determine the profitability of Insurance Company. To do so, calculate these ratios: loss ratio, expense ratio, combined ratio, investment income ratio, and overall operating ratio. Insurance Company provided you with this information:
| **Item** | **Amount** |
|--------------------------------------|--------------|
| Incurred underwriting expenses | $7,500,000 |
| Incurred losses and loss adjustment expenses | 37,000,000 |
| Net written premiums | 22,500,000 |
| Earned premiums | 21,500,000 |
| Net investment income | 2,050,000 |
Is Insurance Company profitable? How did you come to this conclusion?
**Graph/Diagram Explanation:**
There are no graphs or diagrams in this text. The provided information is purely tabular and numerical, designed for ratio analysis to determine profitability.
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