Given earned premiums $100 million and incurred losses $70 million, what is the loss ratio?

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Multiple Choice

Given earned premiums $100 million and incurred losses $70 million, what is the loss ratio?

Explanation:
Loss ratio equals incurred losses divided by earned premiums. With incurred losses of 70 million and earned premiums of 100 million, the calculation is 70 million ÷ 100 million = 0.70, which is 70%. So the loss ratio is 70%. This means 70% of the earned premium was used to cover losses, leaving the remaining portion to cover expenses and profit.

Loss ratio equals incurred losses divided by earned premiums. With incurred losses of 70 million and earned premiums of 100 million, the calculation is 70 million ÷ 100 million = 0.70, which is 70%. So the loss ratio is 70%. This means 70% of the earned premium was used to cover losses, leaving the remaining portion to cover expenses and profit.

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