The expense ratio equals:
A) total underwriting expenses divided by insured losses
B) net income divided by total expenses
C) total expenses divided by net income
D) total expenses divided by premiums written

Question

Quizplus · Accepted Answer

The expense ratio measures the cost of operating an insurance company compared to the revenue it generates. It is calculated by dividing the total expenses of an insurance company by the premiums it writes. Therefore, the correct option is D - total expenses divided by premiums written.

The Expense Ratio Equals