Which of the following statements about property and casualty insurance company operating results is (are)true?
I.An insurance company can have a combined ratio greater than 1 (or 100 percent)and still be required to pay income taxes.
II.By all measures,the property and casualty insurance industry is highly profitable when compared to other industries.
A)I only
B)II only
C)both I and II
D)neither I nor II

Question

Quizplus · Accepted Answer

Statement I is true because a combined ratio greater than 1 means that the company is paying out more in claims and expenses than it is taking in as premiums, but it may still have taxable income from investments or other sources.

Statement II is false because while the property and casualty insurance industry is generally profitable, its profitability varies greatly depending on factors such as underwriting performance, investment returns, and catastrophic losses. Additionally, other industries may have higher profit margins or returns on investment.

Which of the Following Statements About Property and Casualty Insurance