Answered step by step
Verified Expert Solution
Question
1 Approved Answer
6) CU Later Insurance Company collected $5.1 million in premiums and disbursed $2.17 million in losses. Loss adjustment expenses amounted to 6.3 percent and dividends
6) | CU Later Insurance Company collected $5.1 million in premiums | ||||||
and disbursed $2.17 million in losses. Loss adjustment | |||||||
expenses amounted to 6.3 percent and dividends paid to | |||||||
policyholders totaled 1.35 percent. The total income generated | |||||||
from their investments was $225,000 after all expenses were | |||||||
paid. What is the net profitability in dollars? | |||||||
Pure loss = $5.1 million - $2.17 million = $2.93 million | |||||||
Expenses = 0.063 x $5,100,000 = $321,300 | |||||||
Dividends = 0.0135 x $5,100,000 = $68,850 | |||||||
Investment returns = $225,000 | |||||||
Net profits = 2,930,000 - 321,300 - 68,850 + 225,000 = |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started