Loss Ratio Calculator
Calculate insurance loss ratios, expense ratios, combined ratios, and underwriting profitability metrics.
Inputs
$
$
$
$
$
Results
Loss Ratio
70%
Combined Ratio
95%
Underwriting Profit
$50,000.00
≈ 5 years of state college
Profit Margin
5%
Expense Ratio25%
Operating Ratio95%
How to Use This Calculator
- Enter incurred losses (paid plus reserved) for the period.
- Input earned premium for the same period.
- Review the loss ratio percentage.
- Compare to the target loss ratio embedded in the rate filing.
- A combined ratio (loss ratio + expense ratio) above 100% indicates an underwriting loss.
How the result changes with Earned Premiums
| Earned Premiums | Loss Ratio | Combined Ratio | Underwriting Profit |
|---|---|---|---|
| $400,000.00 | 175% | 237.5% | -$550,000.00 |
| $1,400,000.00 | 50% | 67.9% | $450,000.00 |
| $2,600,000.00 | 26.9% | 36.5% | $1,650,000.00 |
| $3,600,000.00 | 19.4% | 26.4% | $2,650,000.00 |
What each input means
- Earned Premiums
- Total earned premiums
- Incurred Losses
- Total incurred losses
- Paid Losses
- Total paid losses
- Loss Adjustment Expenses
- Expenses related to claims handling
- Underwriting Expenses
- Acquisition and operational expenses
How this is calculated
Formula
Loss Ratio = (Incurred Losses / Earned Premiums) × 100Worked example, using the default values
- Identify Input Parameters4 parametersEarned Premiums = 1000000, Incurred Losses = 700000, Paid Losses = 650000, Loss Adjustment Expenses = 50000 = 5 input(s) provided
- Calculate Loss RatioLoss Ratio70 = 70%
- Calculate Combined RatioCombined Ratio95 = 95%
- Calculate Underwriting ProfitUnderwriting Profit50000 = $50,000
- Calculate Expense RatioExpense Ratio25 = 25%
- Calculate Operating RatioOperating Ratio95 = 95%
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