Hi all, I understand the solution in the examiner's report on how to obtain the required loss from the expected gross loss ratio of 50%. However, I'm not sure why the combined ratio in this case is greater than 100%? Isn't Combined ratio = (Incurred Losses+Expenses)/ Earned Prem)? Thanks in advance for your help!
The examiners have used the formula (losses + expenses)/net premium. Perhaps you are using a different denominator?
