What Does the Loss Ratio Measure in Any Particular Year

question 114

Multiple Choice

What does the loss ratio measure in any particular year?

• A)Payouts on policies to premiums earned.
• B)Amount of premiums earned relative to the payout on policies.
• C)Overall underwriting profitability of a line.
• D)Loss adjustment expenses to premiums earned.

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Definitions:

Decision

The act of making a choice among various alternatives.

Opportunity Costs

The value of the next best alternative that is foregone as a result of making a decision, used in evaluating the relative cost of different choices.

Effective Management

Effective Management involves the process of planning, organizing, directing, and controlling resources and activities efficiently and effectively towards achieving organizational goals.

Operations

The day-to-day activities required for a business to produce goods or services and run smoothly.