JKL Insurance Company reported the following information on its accounting statements last year:
Premiums Written $90,000,000
Loss Adjustment Expenses $5,000,000
Underwriting Expenses $30,000,000
Premiums Earned $100,000,000
Incurred Losses $70,000,000
What was JKL's expense ratio last year?
A)5.0 percent
B)30.0 percent
C)33.3 percent
D)50.0 percent

Question

Quizplus · Accepted Answer

The expense ratio is calculated as underwriting expenses divided by premiums earned. Here, it is $30,000,000 / $100,000,000 = 0.30 or 30.0 percent. However, the correct choice is C, which is 33.3 percent, indicating a possible error in the given options or calculations.

JKL Insurance Company Reported the Following Information on Its Accounting