Last year,XYZ Insurance Company had a combined ratio of 102.4 and lost $10.2 million on the insurance that it sold.The company,however,was required to pay income taxes.The best explanation for this apparent contradiction is that XYZ offset its underwriting loss with
A)increased loss reserves.
B)investment income.
C)increased loss adjustment expenses.
D)unearned premiums.

Question

Quizplus · Accepted Answer

The apparent contradiction can be explained by the fact that XYZ Insurance Company had investment income that offset its underwriting loss.

Last Year,XYZ Insurance Company Had a Combined Ratio of 102