The most important operations of an insurance company are: 3 points 0 Reinsurance, investments and loss ratio review 0 Rate making, underwriting, and enterprise risk management 0 Rate making, underwriting and exposure units 0 Underwriting, production and investment Loss ratios are: 3 points 0 A way for insurance companies to evaluate a risk 0 The same as combined ratios 0 The premium does not affect a loss ratio 0 The higher the loss ratio the better the risk What statement is true about an insurance company's combined ratio. 3 points 0 The higher the better, it means the company is in good shape 0 It should be under 50 to reect a healthy risk level 0 The combined ratio is operating expenses plus loss expense 0 The combined ratio is a ratio to determine the cyclical nature of insurance Which one is an external risk to an organization? 3 points Employee steals from the company finances over a period of years Employee steals from the company at one specific incident A hurricane knocks out power at a business owners house O A cyber attack from a foreign country shuts down a company's entire system for three days The benefits of insurance include the following: 3 points Major social investment funds Reduction of worry and fear O Source of economic prevention O Inflated claims If the claims total $10,000 and the premium is $100,000 what is the loss 3 points ratio? 1.10 10% 100% .10%Which statement is MOST true? 3 points 0 A risk has one serious loss every year for ve years, an insurance company would want to write this risk. If a risk has severity and frequency issues they could be a poor risk If a risk has a lot of small claims they may have a severity risk 000 Insurance companies rather have a risk with a lot of small claims than one large claim Which one is NOT a rate-making method? 3 points 0 Judgement rating 0 Class Rating 0 Underwriting O Merit rating Total Assets= 3 points 0 A balance sheet 0 Total liabilities and owner's equity 0 Surplus and Capital 0 Total Admitted Assets Survival of the rm is a: 3 points O Post-loss objective O Preloss objective 0 Meeting legal and nanical obligations 0 Reduction is the business owners anxiety The difference between an insurance company's assets and liabilities is: 3 points O TotalAssets O Suplus and Capital O Policyholders' Surplus O Investment Income There are how many steps in the Risk Management Process 3 points The premium must be economically feasible is? 3 points 0 The law of large numbers 0 One of six characteristics of an insurable risk 0 Indemnication O The loss must be accidental and unintentional When insurance companies earn income on investments, they will usually 3 points charge premiums that: Q Are lower 0 Investment income has no bearing on premiums What would be a "normal" combined ratio for an insurance company? 3 points 0 There is no normal, it depends on many factors