Management Issues for Non-Depository Institutions The U.S. Property/Casualty Insurance Industry had the following profitability ratios for the last two years (in mils.): 2020 2019 Net Written Premiums $650,430 $634,026

Premium Growth Rate 2.6% 3.6%

Net Earned Premiums $637,665 $621,805

Loss Ratio 70.14% 71.08%

Expense Ratio 28.56% 27.82%

Combined Ratio 98.7% 98.9%

Investment Yield 2.7% 3.2%

Overall Profitability Ratio 4.0% 4.3%

Rate of Return on Average Surplus 6.8% 7.8% *Surplus equivalent to Owner's Equity (Assets - Liabilities). -------------------------------------------------------------------------------------------- Using the information above, explain why the overall profitability ratio and rate of return on average surplus (ROE) went down for the P/C Industry in 2020?