Principles of Risk Management and Insurance, 13th Edition

Review Questions

1. 1. a.

   1. What are the three major sections of a balance sheet?

   2. b. What is the balance sheet equation?

2. 1. 2. a.

      What types of assets appear on the balance sheet of an insurance company?

   2. b. Why are the liabilities of a property and casualty insurance company difficult to measure?

3. 1. 3. a.

      What are the two major sources of revenue for a property and casualty insurance company?

   2. b.

      What are the major expenses of a property and casualty insurance company?.

4. 1. 4. a.

      How is the combined ratio of a property and casualty insurance company calculated, and what does the combined ratio measure?

   2. b.

      How is it possible for a property and casualty insurance company to be profitable if its combined ratio exceeds 1 (or 100 percent)?

5. 5.

   Name three ways ...