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    Question

    National Insurance Company reported a total premium

    collection of ₹800 crore for FY2023. During the same period, the company paid out claims amounting to ₹640 crore. What is the claims ratio, and what does it imply about the company’s underwriting performance?
    A 70% – Strong risk control Correct Answer Incorrect Answer
    B 90% – Poor pricing Correct Answer Incorrect Answer
    C 80% – Healthy underwriting Correct Answer Incorrect Answer
    D 60% – Low loss exposure Correct Answer Incorrect Answer
    E 100% – Break-even underwriting Correct Answer Incorrect Answer

    Solution

    Claims Ratio = Claims Paid / Premium = 640 / 800 = 80%. Ratios between 75-85% are generally considered efficient in general insurance underwriting.

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