- CFA Exams
- CFA Level I Exam
- Topic 3. Financial Statement Analysis
- Learning Module 13. Analysis of Financial Institutions
- Subject 4. Analyzing an Insurance Company
CFA Practice Question
Key performance ratios for three insurers
Loss and loss adjustment expense ratio | 65% | 68% | 70%
Underwriting expense ratio | 37% | 32% | 27%
B. B
C. C
Insurers | Insurer A | Insurer B | Insurer C
Loss and loss adjustment expense ratio | 65% | 68% | 70%
Underwriting expense ratio | 37% | 32% | 27%
Which issuer has the most efficient underwriting operation?
A. A
B. B
C. C
Correct Answer: C
It has the smallest combined ratio: 70% + 27% = 97%.
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