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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 =

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