1.Answer the following questions:(CLO- C1, Marks 5)

A.In order to understand the profitability and loss on an insurance premium, you are required to calculate loss ratio, expense ratio and combined ratio from the following details: Premium Earned $240,000; Incurred losses $ 100,000;Loss adjustment expenses $ 80,000; premium written $120,000;Underwriting expenses $180,000

B.ABC Fire-Insurance Corporation and XYZ Re-Insurance Corporation agreed to enter into a Quota-share arrangement by which losses and premiums are shared 55:45.You are required to assess the liability of ABC Fire Insurance Corporation and XYZ Re-Insurance Corporation in the following cases:

a.If a $ 300,000 loss occurred due to fire, calculate the liability of ABC Fire and XYZ Re to be paid to the insured as per the reinsurance agreement.

b.$90,000 is reimbursed by XYZ Re-Insurance Corporation to ABC Fire-Insurance Corporation, then find total loss occurred and the liability of ABC Fire.

c.In a loss occurred due to fire, ABC Fire pays its liability of $275,000 to the insured. Then calculate the liability of XYZ Re and the total loss occurred.

d. A total loss of $250,000 was occurred in a fire and the ABC Fire paid the whole amount to the insured. Find liability of XYZ to be reimbursed to ABC as per the reinsurance contract.