CAS Exam 6C Spring 2015, Question 24
Study guide: Exam 6C
The following information is available from the December 31, 2014 P&C-1 of a property and casualty insurance company. All amounts are in thousands of dollars ($000s).
PREMIUMS AND CLAIMS (60.20) - Total all lines of business
| Item | Amount |
|---|---|
| Premiums written less return premiums - Direct | 235,000 |
| Premiums written less return premiums - Assumed | 150,000 |
| Premiums written less return premiums - Ceded | 155,000 |
| Net unearned premiums at beginning of year | 105,000 |
| Net unearned premiums at period end | 115,000 |
| Claims incurred including adjustment expenses - Direct | 165,000 |
| Claims incurred including adjustment expenses - Assumed | 105,000 |
| Claims incurred including adjustment expenses - Ceded | 125,000 |
COMMISSIONS (80.10) - Total all lines of business
| Item | Amount |
|---|---|
| Total Gross Commissions (line 39) | 65,000 |
| Total Ceded Commissions (line 49) | 35,000 |
STATEMENT OF INCOME (20.30)
| Item | Amount |
|---|---|
| Acquisition Expenses - Taxes (line 12) | 7,000 |
| Acquisition Expenses - Other (line 14) | 8,500 |
| General Expenses (line 16) | 12,500 |
| Investment Operations - Income (line 32) | 14,000 |
| Investment Operations - Realized Gains (Losses) (line 33) | 4,500 |
| Investment Operations - Expenses (line 34) | 500 |
| Other Revenues (line 44) | 800 |
- The income tax rate is 22.0%.
- Assume there is no premium deficiency.
Calculate the following:
Part a (0.75 points)
Net loss ratio
Part b (0.5 points)
Net combined ratio
Part c (0.75 points)
Net income
Answer this question and see the worked solution