The two major components of expense risk for P&C insurers are

Question

Quizplus · Accepted Answer

The two major components of expense risk for P&C insurers are loss adjustment expenses, which can vary based on claims experience, and variations in commission and other expenses, which can be affected by changes in market conditions or company strategies. The combined ratio and premium ratio (A) are measures of profitability, not specifically related to expense risk. Investment yield and premiums earned (C) are related to investment income, not to expense risk. Dividend ratio and investment yield (D) are also related to investment income, not to expense risk.

The Two Major Components of Expense Risk for P&C Insurers