Page 89 - FINAL CFA II SLIDES JUNE 2019 DAY 5.2
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Other Profitability Ratios READING 17: ANALYSIS OF FINANCIAL INSTITUTIONS
Loss and loss adjustment expense ratio measures the relative
success in estimation of risks insured (lower is more
successful). MODULE 17.6: INSURANCE COMPANIES
Dividends to policyholders (shareholders) ratio is a liquidity measure measuring
cash outflow on account of dividends relative to premium income.
Combined ratio after dividends (CRAD) measures total efficiency and is more comprehensive than the combined ratio.
CRAD = combined ratio – dividends to policyholders ratio
