ABC Insurance Company sells property insurance. The company is reunderwriting its book of business at midyear. The company hoped to retain 80 percent of policyowners. The retention rate is 82 percent and the loss ratio on the retained business is 62 percent. The company had hoped to write $2.5 million in premiums for the year, and the midyear value was $1.3 million in premiums written. The new policy goal for the year was 6,000 and 3,500 new policies had been written at midyear. The loss ratio goal for the year was 65 percent, and the loss ratio at midyear was 68 percent. Assuming premium writings and losses are distributed uniformly over the year, what should ABC Insurance Company conclude about its performance at midyear?

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Based on the information provided ABC Insurance Company should conclude that it is performing slight... View the full answer