CAS Exam 6C Spring 2018, Question 21
Study guide: Exam 6C
The following information is available for a property and casualty insurance company as at December 31, 2017. All amounts are in thousands of dollars ($000s).
| 2017 | 2016 | |
|---|---|---|
| Net Written Premiums | 140,000 | 130,000 |
| Net Earned Premiums | 135,000 | 120,000 |
| Net Income After Taxes | 8,500 | 8,000 |
| Other Comprehensive Income | 300 | 500 |
| Dividends | 2,000 | 1,500 |
| Total Assets | 120,000 | ? |
| Total Liabilities | ? | 50,000 |
| Equity | ? | 60,000 |
Part a (1.5 points)
Calculate the following ratios as at December 31, 2017:
- i. Return on equity
- ii. Return on assets after tax
- iii. Overall net leverage
Part b (1 point)
Using the ratios calculated in part a. above, assess the financial health of the company as at December 31, 2017.
Answer this question and see the worked solution