Required in order to maintain positive operating ratio

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An insurance company’s projected loss ratio is 78.7 percent, and its loss adjustment expense ratio is 13 percent. It estimates that commission payments and dividends to policyholders will add another 17 percent. What is the minimum yield on investments required in order to maintain a positive operating ratio? (Round your answer to 2 decimal places. (e.g., 32.16))

Minimum yield on investments

An insurance company collected $4.3 million in premiums and disbursed $2.03 million in losses. Loss adjustment expenses amounted to 7.3 percent and dividends paid to policyholders totaled 1.9 percent. The total income generated from their investments was $240,000 after all expenses were paid. What is the net profitability in dollars? (Enter your answer in dollars not in millions.)

Net profitability $

Reference no: EM131549648

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