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Insurance Combined Ratio Calculator.
Calculate an insurance combined ratio from loss and expense ratios.
Set your values
Results update as you type.
Results are estimates from the stated formula and inputs; verify assumptions before making financial decisions.
FAQs
How is Insurance Combined Ratio calculated?
The result is descriptive and does not provide underwriting advice.
Use Cases
Assess underwriting performance
Use the calculator to quickly determine whether an insurance book is profitable by comparing the combined ratio to 100%.
Example: If loss ratio is 65% and expense ratio is 30%, combined ratio is 95% – profitable.
Monitor trends over time
Calculate ratios for different periods to see if underwriting performance is improving or deteriorating.
Example: Compare combined ratios for Q1 and Q2 to spot changes.
Frequently Asked Questions
- What is the combined ratio in insurance?
- The combined ratio is a measure of an insurer's underwriting profitability, calculated as the sum of the loss ratio and the expense ratio. A combined ratio below 100% indicates an underwriting profit, while above 100% indicates a loss.
- How do I calculate the loss ratio?
- The loss ratio is calculated by dividing incurred losses (including loss adjustment expenses) by earned premiums. It represents the proportion of premiums used to pay claims.
- What does the expense ratio represent?
- The expense ratio is calculated by dividing underwriting expenses (such as commissions, administrative costs, and other operating expenses) by earned premiums. It shows the proportion of premiums consumed by operational costs.
Tips & Common Mistakes
Tips
- Ensure you use consistent premium figures (earned premiums) for both loss and expense ratios.
- Include all relevant loss adjustment expenses in the loss ratio for accuracy.
- Use the combined ratio alongside other metrics like return on equity for a fuller picture.
- Remember that a combined ratio below 100% indicates an underwriting profit.
Common Mistakes to Avoid
- Using written premiums instead of earned premiums, which can distort ratios.
- Forgetting to include loss adjustment expenses in the loss ratio.
- Comparing combined ratios across different lines of business without adjusting for risk.
Last updated: August 13, 2026