Earned premium for XYZ Insurance (XYZ) for the year was $500 million and incurred losses were $400 million. Incurred underwriting expenses were $60 million. XYZ had a net investment gain of $40 million for the year. Which one of the following is XYZ's overall gain or loss from operations?

Earned premium for XYZ Insurance (XYZ) for the year was $500 million and incurred losses were $400 million. Incurred underwriting expenses were $60 million. XYZ had a net investment gain of $40 million for the year. Which one of the following is XYZ's overall gain or loss from operations? 



A. $80 million gain
B. $80 million loss
C. $200 million gain
D. $200 million loss


Answer: A. XYZ's overall gain or loss from operations is $500 million earned premium minus $400 million incurred losses minus $60 million underwriting expenses plus $40 million net investment gain, for an $80 million gain.

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