Alberta General Insurance Level 1 Practice Exam

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Ace your Alberta General Insurance Level 1 Exam with our comprehensive practice quiz. Tailored to mimic the real test, our quiz offers detailed explanations, expert tips, and all you need to succeed. Start your path to becoming a licensed professional today!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

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What does the Expense Ratio represent?

The ratio of earned premiums to insurer's profits
The ratio of acquisition costs and other expenses to earned premiums
The sum of incurred claims and expenses
The difference between earned premiums and expenses

The correct answer is: The ratio of acquisition costs and other expenses to earned premiums

The Expense Ratio represents the ratio of acquisition costs and other expenses to earned premiums. This means that it is the percentage of an insurer's expenses in relation to the premiums earned. Option A is incorrect because it mentions the insurer's profits, which may not necessarily be included in the expense ratio. Option C is incorrect because it only considers claims and expenses, not acquisition costs. Option D is incorrect because it only considers the difference between premiums and expenses, but not the expenses themselves.