https://www.insurerbrain.com/w/index.php?action=history&feed=atom&title=Definition%3ACombined_ratioDefinition:Combined ratio - Revision history2026-06-13T10:29:24ZRevision history for this page on the wikiMediaWiki 1.43.8https://www.insurerbrain.com/w/index.php?title=Definition:Combined_ratio&diff=6592&oldid=prevPlumBot: Bot: Creating new article from JSON2026-03-09T16:22:17Z<p>Bot: Creating new article from JSON</p>
<p><b>New page</b></p><div>📊 '''Combined ratio''' is the standard profitability metric for [[Definition:Property and casualty insurance (P&C) | property and casualty]] [[Definition:Insurance carrier | insurers]], calculated by adding the [[Definition:Loss ratio | loss ratio]] to the [[Definition:Expense ratio | expense ratio]]. Expressed as a percentage, it measures the total cost of [[Definition:Claims | claims]] and operating expenses relative to [[Definition:Earned premium | earned premium]]. A combined ratio below 100 percent indicates an [[Definition:Underwriting profit | underwriting profit]], meaning the insurer is collecting more in [[Definition:Premium | premiums]] than it spends on losses and expenses; a ratio above 100 percent signals an [[Definition:Underwriting loss | underwriting loss]].<br />
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🧮 The loss ratio component captures [[Definition:Incurred loss | incurred losses]] and [[Definition:Loss adjustment expense (LAE) | loss adjustment expenses]] as a share of earned premium, while the expense ratio reflects [[Definition:Acquisition cost | acquisition costs]] — such as [[Definition:Commission | commissions]] and [[Definition:Brokerage | brokerage fees]] — plus general and administrative overhead. Some analysts further decompose the metric into a trade combined ratio (using net figures) and a gross combined ratio to understand [[Definition:Reinsurance | reinsurance]] effects. Because it distills underwriting performance into a single number, the combined ratio is featured prominently in quarterly earnings, [[Definition:Rating agency | rating agency]] reviews, and investor presentations.<br />
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💰 Tracking the combined ratio over time reveals whether an insurer's [[Definition:Underwriting | underwriting]] discipline and cost structure are sustainable. A carrier consistently below 100 percent is generating profit purely from insurance operations, before any contribution from [[Definition:Investment income | investment income]] — a hallmark of disciplined [[Definition:Risk selection | risk selection]] and [[Definition:Claims management | claims management]]. Conversely, a persistently elevated ratio may prompt [[Definition:Reinsurer | reinsurers]] to tighten terms and [[Definition:Rating agency | rating agencies]] to reconsider the company's outlook. For these reasons, the combined ratio remains the single most-watched indicator in any conversation about an insurer's financial health.<br />
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'''Related concepts'''<br />
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* [[Definition:Loss ratio]]<br />
* [[Definition:Expense ratio]]<br />
* [[Definition:Underwriting profit]]<br />
* [[Definition:Earned premium]]<br />
* [[Definition:Investment income]]<br />
* [[Definition:Operating ratio]]<br />
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