Ask Question
21 January, 08:58

An insurance company's projected loss ratio is 77.5 percent, and its expense ratio is 23.9 percent. It estimates that dividends to policyholders will add another 5 percent. What is the minimum yield on investments required in order to maintain a positive operating ratio? (LG 15-6)

+1
Answers (1)
  1. 21 January, 09:17
    0
    6.4%

    Explanation:

    For computing the minimum yield on investment, first we have to find out the combined ratio which is shown below:

    = Projected loss percentage + expense ratio + dividend percentage

    = 77.5% + 23.9% + 5%

    = 106.4%

    So, the minimum yield on investment required is

    = 106.4% - 100%

    = 6.4%

    The 100% is the percentage value

    We simply applied the above formula
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “An insurance company's projected loss ratio is 77.5 percent, and its expense ratio is 23.9 percent. It estimates that dividends to ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers