GK
INSURANCE AWARENESS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The ratio of losses incurred to premiums earned; anticipated when rates are first formulated is termed as____
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Expense Ratio
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Expected Loss Ratio
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Extended Coverage
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Extra Expense Insurance
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Explanation:
Detailed explanation-1: -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%.
Detailed explanation-2: -Expected loss ratio is calculated by dividing the current year incurred losses to current year earned premiums. Expected loss ratio is calculated by dividing the current year incurred lossed to current year earned premiums. Expected loss ratio: This is the ratio of expected claims divided by earned premium.
There is 1 question to complete.