Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

ABC insurance company begins on 12/31/18 and has a cash investment of $600,000.On 1/1/19 it sells a single year policy for $120,000.On 7/1/19 (midway through

ABC insurance company begins on 12/31/18 and has a cash investment of $600,000.On 1/1/19 it sells a single year policy for $120,000.On 7/1/19 (midway through the year), it sells a single year policy for $80,000.

Underwriting expenses in 2019 are $40,000.It earns investment income of $16,000 in 2019.

On 6/1/19, it pays a $32,000 claim.On 9/15/19, it pays a $31,000 claim.On 12/31/19, it has total case reserves of $38,000 and total IBNR of $75,000.

1.What is 2018 written premium?

2.What is 2018 earned premium?

3.What is 2018 incurred loss?

4.What is the unearned premium reserve at 12/31/18?

5.What is the incurred loss ratio for 2018?

6.What is the expense ratio for 2018?

7.What is the combined ratio for 2018?

8.What is the investment income ratio for 2018?

9.What is the operating ratio for 2018?

10.Another company had an operating ratio of 115% in 2018.Which company had the better operating ratio in 2018?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Statement Analysis

Authors: K. R. Subramanyam, John J. Wild

10th edition

73379433, 73379432, 978-0073379432

More Books

Students also viewed these Accounting questions