A property and liability insurance company's loss ratio and expense ratio, respectively, for 2013 – 2015 were:
2013: 74% 31%
2014: 68% 33%
2015: 66% 30%
Which of the following statements is true about the company's underwriting results for this time period?
A) The insurer made money from its underwriting activities each year.
B) The insurer's profitability from underwriting has been deteriorating each year.
C) The insurer's profitability from underwriting has been improving each year.
D) The insurer lost money from its underwriting activities each year.
Answer: C
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Klein Corp acquired land by issuing its common stock. How should this transaction be disclosed when a statement of cash flows is prepared?
a. In a supplemental schedule of noncash investing and financing activities or in a note. b. The acquisition of land should be reported as an investing activity and the issuance of the stock as a financing activity. c. Using the master T-account approach. d. The transaction does not need to be disclosed.
A company that uses leverage is attempting to earn an overall return that is higher than the cost of funds received from
a. preferred and common stockholders. b. common stockholders only. c. preferred stockholders and borrowed funds. d. borrowed funds only.
Four hundred people were asked whether gun laws should be more stringent. Three hundred said "yes," and 100 said "no". The point estimate of the proportion in the population who will respond "no" is
A. 75. B. 0.25. C. 0.75. D. 0.50.
Which of the following is not required to apply the gross margin method?
A. The beginning inventory for the current period B. Total sales for the current period C. The amount of inventory on hand at the end of the current period D. Amount of purchases during the current period