Okuzeka
Insurance vocabulary · Insurance Market & Finance

Combined ratio

Meaning in insurance, with examples

nounAdvanced term

In insurance, combined ratio means: The loss ratio plus the expense ratio. Below 100 percent means the insurer made an underwriting profit; above 100 percent means an underwriting loss.

In Turkish: birleşik rasyo, bileşik oran

How it is used

The headline figure in non-life results and analyst calls. Insurers report, target and try to bring down their combined ratio. A company can still be profitable above 100 percent if its investment income is high.

Example sentences

  1. Our combined ratio fell to 96 percent, so we made a profit from underwriting.

  2. Analysts asked why the combined ratio was above 100 percent for the second year.

Common collocations

  • combined ratio of
  • target combined ratio
  • improve the combined ratio
  • combined ratio above 100
  • loss ratioClaims costs divided by earned premiums, shown as a percentage; it shows how much of the premium was spent on paying losses.
  • underwritingThe process of studying a risk, deciding whether to insure it and setting the price and conditions of the policy.
  • gross written premiumThe total premium from all policies an insurer writes in a period, before the share passed to reinsurers is deducted.
  • solvencyAn insurer's ability to pay all its future claims and debts, measured by comparing its capital with the amount regulators require.

More terms: Insurance Market & Finance

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This page explains English vocabulary for learners. It is not financial advice.