Hi, I am referring to the expense ratio formula. We can use incurred expenses/earned premium as the formula but shouldn't the incurred expenses be net of DAC? in the report it seems like the increase in DAC was not taken into account..
Usually we use expenses paid, and that includes the total acquisition costs, so you wouldn't take credit for DAC which would reduce your expenses when calculating this ratio.
See page 13 of Chapter 27. The expense ratio is normally defined as: expenses paid / written premiums
