The Ratio of an Insurance Company's Net Profit to Policyholders

question 4

Multiple Choice

The ratio of an insurance company's net profit to policyholders' surplus is called

• A) liquidity ratio.
• B) return on net worth.
• C) net underwriting margin.
• D) return on assets.

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Definitions:

Direct Material Price Variance

The difference between the actual cost of direct materials and the standard cost multiplied by the actual quantity used.

Costs Of Goods Sold

Direct costs attributable to the production of goods sold by a company, including materials and labor, but excluding indirect expenses such as sales and distribution costs.

Standard Costs

Benchmark costs established for the purpose of assessing financial performance and identifying variances in production or operations.

Controlling Costs

The process of monitoring and managing expenses to ensure they do not exceed budgeted amounts.