Which of the following best describes the CWP ratio?

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Multiple Choice

Which of the following best describes the CWP ratio?

The idea tested is how to measure the share of a specific subset within claims that have been closed. The CWP ratio is the number of CWP claims divided by the total number of closed claims. It tells you what fraction of closed claims are of the CWP type, independent of the monetary value of those claims. This matters because it’s a count-based measure of claim mix among those that have been resolved, not a financial measure. Using earned or total premium would mix in monetary size, which isn’t what this ratio is designed to capture. Using open claims in the denominator would distort the metric since those claims aren’t closed yet, and the ratio aims to reflect the composition of claims that have reached closure. For example, if there are 50 closed claims and 5 are CWP, the CWP ratio is 5/50 = 0.10, i.e., 10%.

The idea tested is how to measure the share of a specific subset within claims that have been closed. The CWP ratio is the number of CWP claims divided by the total number of closed claims. It tells you what fraction of closed claims are of the CWP type, independent of the monetary value of those claims.

This matters because it’s a count-based measure of claim mix among those that have been resolved, not a financial measure. Using earned or total premium would mix in monetary size, which isn’t what this ratio is designed to capture. Using open claims in the denominator would distort the metric since those claims aren’t closed yet, and the ratio aims to reflect the composition of claims that have reached closure.

For example, if there are 50 closed claims and 5 are CWP, the CWP ratio is 5/50 = 0.10, i.e., 10%.

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