GK
INSURANCE AWARENESS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Percentage of each premium rupee a property/casualty insurer spends on claims and expenses is called ____
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Acts of God
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Combined Ratio
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Actual Loss Ratio
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Actuarial Cost Assumptions
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Explanation:
Detailed explanation-1: -Definition: The combined ratio is defined as the sum of incurred losses and operating expenses measured as a percentage of earned premium. It is a measure of the profitability of the insurer. Description: The combined ratio can be decomposed into claims ratio and expense ratio.
Detailed explanation-2: -The loss ratio formula is insurance claims paid plus adjustment expenses divided by total earned premiums. For example, if a company pays $80 in claims for every $160 in collected premiums, the loss ratio would be 50%.
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