# CPCU 520: Insurance Operations/List of Formulas

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 Author: natte ID: 281456 Filename: CPCU 520: Insurance Operations/List of Formulas Updated: 2014-10-19 20:46:23 Tags: CPCU CPCU520 Insurance Folders: CPCU 520 Description: CPCU 520: Insurance Operations/List of Formulas Show Answers:

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1. Loss Ratio=

(1.22)
2. Expense Ratio=
• (1.22)
3. Combined Ratio (trade basis)=
• (1.22)
• LAE=Loss Adjustment Expense
4. Combined ratio(trade basis)(simplified)=
(1.22)
5. Investment Income Ratio=
(1.23)
6. Overall Operating Ratio=
(1.23)
7. Return on equity=
(1.23)
8. Insurer's retention ratio
The insurer's retention ratio is the percentage of expiring insurance policies that an insurer renews, and it can be measured by policy count, premium volume, or both.(1.24)
9. Lapse ratio
The Lapse ratio is calculated by dividing the number of policies that lapse during a period by the total number of policies written at the beginning of that period. A lapse in insurance is defined as a point in time when a policy has been cancelled or terminated for failure to pay the premium,. or when the contract has been voided for other reasons (1.24)

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