Okuzeka
Insurance vocabulary · Insurance Market & Finance

Loss ratio

Meaning in insurance, with examples

nounCommon term

In insurance, loss ratio means: Claims costs divided by earned premiums, shown as a percentage; it shows how much of the premium was spent on paying losses.

In Turkish: hasar/prim oranı, hasar oranı

How it is used

The most watched figure in underwriting meetings. A loss ratio rises, improves or deteriorates; a 65 percent loss ratio means 65 of every 100 lira of premium went to claims. Each line of business and each agent has its own loss ratio.

Example sentences

  1. The loss ratio on the motor book improved from 82 to 71 percent.

  2. Agents with a loss ratio above 100 percent will be reviewed.

Common collocations

  • loss ratio improves
  • high loss ratio
  • target loss ratio
  • incurred loss ratio
  • combined ratioThe loss ratio plus the expense ratio. Below 100 percent means the insurer made an underwriting profit; above 100 percent means an underwriting loss.
  • premiumThe amount of money a customer pays to an insurance company for a policy, usually once a year or in monthly instalments.
  • claimA formal request to an insurance company to pay for a loss, damage or medical cost that the policy covers.
  • underwritingThe process of studying a risk, deciding whether to insure it and setting the price and conditions of the policy.

More terms: Insurance Market & Finance

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