Combined ratio

Combined ratio uses the relationship between the total amount of earned premiums and the total amount of incurred losses and expenses over a given period of time to measure the profitability and financial health of an insurance company. There is an inverse relationship between the combined ratio and the company’s profitability. A combined ratio that is below 100 percent, shows that the company is making profit. 

Combined Ratio = ((Incurred Losses + Expenses) / Earned Premium)*100


Combined Ratio = Underwriting Loss Ratio + Expense Ratio

Read this article to learn more.

This is default text for notification bar