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IIA Exam IIA-CFSA Topic 7 Question 35 Discussion

Actual exam question for IIA's IIA-CFSA exam
Question #: 35
Topic #: 7
[All IIA-CFSA Questions]

The ''combined ratio'' of an insurance company is the ratio from combining which of the following?

1. The ''loss ratio.''

2. The ''other underwriting expense ratio.''

3. The ''expense ratio.''

4. The ''IBNR.''

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Suggested Answer: C

by Brett at Jul 03, 2023, 05:04 PM

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Vivienne
2 months ago
The combined ratio is the insurance industry's version of the 'everything bagel' – just throw in all the ratios and call it a day.
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Brent
1 months ago
3. Yeah, it's like a comprehensive measure of an insurance company's performance.
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Stephaine
2 months ago
2. So, it's not just one ratio, but a combination of different ratios.
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Xuan
2 months ago
1. The combined ratio is the sum of the loss ratio and the other underwriting expense ratio.
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Micah
3 months ago
I believe the correct answer is A) I and II only, as those are the components that make up the combined ratio.
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Cassie
3 months ago
The combined ratio is like a financial Voltron – you only need the loss and expense ratios to form the ultimate insurance metric. B is the answer, no doubt about it.
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Andra
2 months ago
Yes, exactly. It's a simple formula that packs a lot of information. B covers the essentials.
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Jani
2 months ago
I agree, B is the answer. The loss and other underwriting expense ratios are all you need for the combined ratio.
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Isabelle
3 months ago
I agree with Carmelina, the expense ratio and IBNR are not included in the combined ratio.
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Teri
3 months ago
If you included IBNR, you'd be double-counting expenses. The combined ratio is just the loss ratio and expense ratio. B all the way!
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Ruby
3 months ago
IBNR stands for 'Incurred But Not Reported,' which is a liability, not a ratio, so it doesn't belong in the combined ratio. B is the correct answer.
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Caprice
2 months ago
Exactly, it's important to understand the components that make up the combined ratio in insurance companies.
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Bo
2 months ago
So, the combined ratio is the sum of the loss ratio and the other underwriting expense ratio.
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Clorinda
2 months ago
Yes, that's correct. IBNR is not a ratio, so it shouldn't be included in the combined ratio.
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Lina
3 months ago
I think the answer is B) I and II only.
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Carmelina
3 months ago
I think the combined ratio includes the loss ratio and other underwriting expense ratio.
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Belen
3 months ago
The 'combined ratio' is the sum of the loss ratio and the expense ratio, so I'd go with B. I and II only.
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Chau
3 months ago
I'm not sure, but I think the combined ratio also includes the expense ratio and IBNR.
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Aja
4 months ago
I agree with Carlene, the combined ratio is calculated by combining the loss ratio and other underwriting expense ratio.
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Carlene
4 months ago
I think the combined ratio includes the loss ratio and other underwriting expense ratio.
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