For this assignment, you have been asked by your boss to determine the profitability of XYZ Insurance Company. To do so, calculate the trade basis combined ratio. XYZ Insurance Company provided you with the following information:

Incurred Underwriting Expenses	$5,000,000
Incurred losses	$18,000,000
Loss adjustment expenses	$830,000
Net written premiums	$22,500,000
Earned premiums	$21,500,000

1.What is the combined ratio?

(HINT: Combined ratio (trade basis) = loss ratio + expense ratio. You'll need to determine the loss and expense ratios)

show your work--which could help you to earn points.

2. What is your opinion of XYZ Insurance company? Profitable? Not Profitable? Why?

3. What are some measures they could take to improve their expense ratio? (bullet point answers are fine)