Using the attached Liberty Mutual financial statements, answer the following questions.
a. Using the following, calculate the following for the 2021. (4 points each)
1. Loss ratio
2. Expense ratio
3. Dividend ratio
4. Combined ratio after dividends
5. Investment yield
6. Operating ratio
7. Overall profitability
b. Based on the combined ratio for the insurance company, how is it doing with regards to its underwriting activities? Why? (3 points)
c. The property & casualty industry average overall profitability in 2021 was 3.00%. Evaluate the insurance companys overall profitability based on your calculation above. (3 points)
ASSETS LIABILITIES, SURPLUS AND OTHER FUNDS 35. Unassighod fundt (cuplest) 36. Less treatury ntock, ot coot 361 Q shares corvon (value inchoded in Line 30$3 36.2 O shares prolored (ralue ndaded in Line 315 (0) 37. Sumpus ab nogarde poich holders (Unes 29 to 35, less 36) (Page 4, Une 39). 38. Totals (Poos 2i ine 2d, Gol.5. STATEMENT OF INCOME UNDERWRING INCOME 1. Preniuns tired (Pet 1, Lhe 35 , Colvim 4 ) Debucrions: 2. Loses houged (Pat 2. Lno as, Column 7) 2 Loss aquithent erpeoues named (Part 3 . Lne 25 Coume i) 4. Oover insererting expenses incuned (Part 3. Une 25, Colume 2) 5. Totil erderwing deductions thes 2 troogh 5 ) 7. Niet heomo of prectedod ons 8. Net undocuetheg gas foss) (line 1 mines tine 6 plus tine 7 INVESTMENT INCOME OTHERINCOME is. Tolk iflerinoume (inses 12 trowgh 14 ) CAPTTAL ANO SURPLUS ACCOUNT ASSETS 15. Primiliming consideraions: 15.1 Uncolected premims and agents balences in the course of collection 15. Deterred premims, agents' balances and instalinents booked but delented and not yet doe (including 5.39 .486 .22 earned but ubbiled premiuns) 153 Aecrued retrotpective premims (\$ 155,447,911) and contracts subjpct fo resetemination is (i) 16. Reinsurance: 16.1 Arourh recoverable from reinerers 16.2 Funds hold by or deposilod wth reinsured comparies 16.3 Otwer anourts reseivable under reinsurance contracts 17. Amounts rosoivalle relaling to urintured plans 18.1 Curent federal and forign income tax reooverable and interest thereon 18.2. Net dalermed tas asset 19. Guanrity funds roceivalin or on deposit 20. Eledroric date processing equpment and sohtare 21. Fumbure and ecuipment, inclusing hesth care delivery assets is 0) 22. Net adjustment ha assets and tablises due bo loregn exchange rates 23. Regivibes from parent subsidiaries and affilites 24. Heath aire is 0) and other amounts recekatie 25. Aogegate witteins for ofher-tan-tivesied assets 26. Total assets excuoding Separale Acoounts, Scorepaled Accouns and Proteded Cel Acocunts (Linet 12jo 25) 27. From Separate Accourts, Segrepaled Accounts and Prolected Cell Acoounts 26. Totsi fines 26 and 27 LIABILITIES, SURPLUS AND OTHER FUNDS 12. Drats ovatanding 20. Deivatves 21. Payabie for meounties 22. Payatie la secuetion lesine 22. Labily for amcunte held unser unvoued plans 26. Captsi notes 5 o oavinimet huroen 5 2. Acotgone arbe in for labites 27. Pounded ontinatibes 28. Tots labites [ ines 28 and 27 20. Aogergle wribins for specal euples tunds 30. Cenmon chplat sook 31. Prefened caplat itsok 32. Agovgle wre-es for ohe elan epeolal suplus lunds 3. Suplis notas 3. Gros pais in and contbuled surias 35. Uranoped funds (twiplet) 36. Laen teaty todk at onet 37. Suppes is ngunti polchtobives (Lines 29 to 35 , lest 36 ) (Page 4, Line 34) 3. Total Pere 2. Line 21Cd.3] 3 STATEMENT OF INCOME ASSETS LIABILITIES, SURPLUS AND OTHER FUNDS 35. Unassighod fundt (cuplest) 36. Less treatury ntock, ot coot 361 Q shares corvon (value inchoded in Line 30$3 36.2 O shares prolored (ralue ndaded in Line 315 (0) 37. Sumpus ab nogarde poich holders (Unes 29 to 35, less 36) (Page 4, Une 39). 38. Totals (Poos 2i ine 2d, Gol.5. STATEMENT OF INCOME UNDERWRING INCOME 1. Preniuns tired (Pet 1, Lhe 35 , Colvim 4 ) Debucrions: 2. Loses houged (Pat 2. Lno as, Column 7) 2 Loss aquithent erpeoues named (Part 3 . Lne 25 Coume i) 4. Oover insererting expenses incuned (Part 3. Une 25, Colume 2) 5. Totil erderwing deductions thes 2 troogh 5 ) 7. Niet heomo of prectedod ons 8. Net undocuetheg gas foss) (line 1 mines tine 6 plus tine 7 INVESTMENT INCOME OTHERINCOME is. Tolk iflerinoume (inses 12 trowgh 14 ) CAPTTAL ANO SURPLUS ACCOUNT ASSETS 15. Primiliming consideraions: 15.1 Uncolected premims and agents balences in the course of collection 15. Deterred premims, agents' balances and instalinents booked but delented and not yet doe (including 5.39 .486 .22 earned but ubbiled premiuns) 153 Aecrued retrotpective premims (\$ 155,447,911) and contracts subjpct fo resetemination is (i) 16. Reinsurance: 16.1 Arourh recoverable from reinerers 16.2 Funds hold by or deposilod wth reinsured comparies 16.3 Otwer anourts reseivable under reinsurance contracts 17. Amounts rosoivalle relaling to urintured plans 18.1 Curent federal and forign income tax reooverable and interest thereon 18.2. Net dalermed tas asset 19. Guanrity funds roceivalin or on deposit 20. Eledroric date processing equpment and sohtare 21. Fumbure and ecuipment, inclusing hesth care delivery assets is 0) 22. Net adjustment ha assets and tablises due bo loregn exchange rates 23. Regivibes from parent subsidiaries and affilites 24. Heath aire is 0) and other amounts recekatie 25. Aogegate witteins for ofher-tan-tivesied assets 26. Total assets excuoding Separale Acoounts, Scorepaled Accouns and Proteded Cel Acocunts (Linet 12jo 25) 27. From Separate Accourts, Segrepaled Accounts and Prolected Cell Acoounts 26. Totsi fines 26 and 27 LIABILITIES, SURPLUS AND OTHER FUNDS 12. Drats ovatanding 20. Deivatves 21. Payabie for meounties 22. Payatie la secuetion lesine 22. Labily for amcunte held unser unvoued plans 26. Captsi notes 5 o oavinimet huroen 5 2. Acotgone arbe in for labites 27. Pounded ontinatibes 28. Tots labites [ ines 28 and 27 20. Aogergle wribins for specal euples tunds 30. Cenmon chplat sook 31. Prefened caplat itsok 32. Agovgle wre-es for ohe elan epeolal suplus lunds 3. Suplis notas 3. Gros pais in and contbuled surias 35. Uranoped funds (twiplet) 36. Laen teaty todk at onet 37. Suppes is ngunti polchtobives (Lines 29 to 35 , lest 36 ) (Page 4, Line 34) 3. Total Pere 2. Line 21Cd.3] 3 STATEMENT OF INCOME
