Final answer:
The loss ratio for the U.S. Property/Casualty insurance industry is calculated using the Losses and Loss Adjustment Expenses Incurred and the Premiums Earned, resulting in a ratio of 75.9%, with the closest answer option being 76.0%.
Step-by-step explanation:
The question pertains to calculating the loss ratio for the U.S. Property/Casualty insurance industry based on the given 2017 data. The loss ratio is calculated as the ratio of Losses and Loss Adjustment Expenses Incurred to Premiums Earned. Using the provided figures:
Loss Ratio = (Losses and Loss Adjustment Expenses Incurred / Premiums Earned) × 100
Plugging in the numbers:
Loss Ratio = (410.2 / 540.6) × 100
Loss Ratio = 75.9%
However, since this precise percentage is not provided in the options, we will need to check if there is any rounding or typographical error in the choices. The closest option to our calculated figure is option (b) 76.0%
Thus, the factors detailed above summarize how premiums, investment income, and expenses interact within the financial dynamics of an insurance company, leading to the need to correctly calculate financial ratios like the loss ratio for assessing the company's performance.