4. For the past calendar year, the casualty insurance company Pillow reported the financial information for a specific line of insurance: Incurred losses $120 million Underwriting expenses $45 million Premiums earned $340 million, Premium written $420 million Loss adjustment expenses $0.5 million Net investment income $22 million Is this insurance company profitable? Explain your answer. The combined ratio = the loss ratio + expense ratio =(120+0.5/340)+(45/420)=0.486 The overall ratio =0.418(22/340)=0.42