Last year, XYZ Insurance Company had a combined ratio of 102.4 and los

Last year, XYZ Insurance Company had a combined ratio of 102.4 and lost $10.2 million on the insurance that it sold.

The company, however, was required to pay income taxes. The best explanation for this apparent contradiction is that XYZ offset its underwriting loss with
A) increased loss reserves.
B) investment income.
C) increased loss adjustment expenses.
D) unearned premiums.

ANSWER

Answer: B