The combined ratio is the sum of it:
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A. B. C. D.D
The combined ratio is a financial measure used in the insurance industry to evaluate the profitability of an insurer's underwriting activities. It is the sum of two ratios: the loss ratio and the expense ratio.
A. The loss ratio represents the percentage of claims paid out by the insurer in relation to the premiums earned. It is calculated by dividing the amount of claims paid by the insurer by the amount of premiums earned during a specific period. The loss ratio reflects the insurer's ability to accurately estimate and price risk.
B. The expense ratio represents the insurer's operating expenses as a percentage of the premiums earned. It includes all costs associated with underwriting and policy administration, such as salaries, rent, and marketing expenses. The expense ratio reflects the efficiency of the insurer's operations.
C. The dividend ratio is not included in the combined ratio. It is the ratio of dividends paid to policyholders to the premiums earned. It measures the insurer's policyholder loyalty and ability to generate returns for its policyholders.
D. Therefore, the correct answer is D. All of the above, since the combined ratio includes both the loss ratio and the expense ratio.