The loss ratio is calculated by dividing the total losses incurred (losses paid plus loss adjustment expenses) by the total earned premiums.

Here are the steps to calculate the loss ratio:

1. First, we need to calculate the total losses incurred. This is done by adding the losses paid ($160 million) to the loss adjustment expenses ($12 million). So, total losses incurred = $160 million + $12 million = $172 million.

2. Next, we divide the total losses incurred by the total earned premiums. So, loss ratio = total losses incurred / total earned premiums = $172 million / $185 million.

3. To get the loss ratio in percentage, we multiply the result by 100.

So, the loss ratio = ($172 million / $185 million) * 100.

Now, you can calculate the final value.

Question

The loss ratio is calculated by dividing the total losses incurred (losses paid plus loss adjustment expenses) by the total earned premiums.

Here are the steps to calculate the loss ratio:

1. First, we need to calculate the total losses incurred. This is done by adding the losses paid ($160 million) to the loss adjustment expenses ($12 million). So, total losses incurred = $160 million + $12 million = $172 million.

2. Next, we divide the total losses incurred by the total earned premiums. So, loss ratio = total losses incurred / total earned premiums = $172 million / $185 million.

3. To get the loss ratio in percentage, we multiply the result by 100.

So, the loss ratio = ($172 million / $185 million) * 100.

Now, you can calculate the final value.

Knowee AI · Accepted Answer

The loss ratio is calculated by dividing the total losses incurred (losses paid plus loss adjustment expenses) by the total earned premiums.

Here are the steps to calculate the loss ratio:

1. First, we need to calculate the total losses incurred. This is done by adding the losses paid ($160 million) to the loss adjustment expenses ($12 million). So, total losses incurred = $160 million + $12 million = $172 million.

2. Next, we divide the total losses incurred by the total earned premiums. So, loss ratio = total losses incurred / total earned premiums = $172 million / $185 million.

3. To get the loss ratio in percentage, we multiply the result by 100.

So, the loss ratio = ($172 million / $185 million) * 100.

Now, you can calculate the final value.

An insurance company has a loss adjustment expense of $12 million. Their severity is $6,200 per claim with frequency of 8.2%. The company has earned a premium of $185 million and incurred losses of $160 million. What is the loss ratio?

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