# Combined Ratio Calculator

URL: https://speedycalculator.com/calculators/finance/combined-ratio/
Last updated: 2026-10-25

> The combined ratio calculator measures an insurance company's underwriting profitability – losses plus expenses divided by earned premiums – with the loss ratio and expense ratio, and the underwriting profit or loss.

## Inputs

- Incurred losses
- Loss adjustment expenses
- Underwriting expenses (commissions, admin)
- Earned premiums

## Results

- Loss ratio
- Expense ratio
- Combined ratio
- Underwriting profit (+) or loss (−)
- Underwriting result

## Formula

```
Loss ratio = (incurred losses + loss adjustment expenses) ÷ earned premiums
Expense ratio = underwriting expenses ÷ earned premiums (or written premiums)
Combined ratio = loss ratio + expense ratio
```

## Explanation

A combined ratio below 100% means the insurer makes an underwriting profit; above 100% it pays out more than it earns in premiums and relies on investment income. U.S. property-casualty insurers have recently been around 95–105%.

### How to use the Combined Ratio Calculator

- **Incurred losses**
- **Loss adjustment expenses**
- **Underwriting expenses (commissions, admin)**
- **Earned premiums**

Results update as you type, and every field accepts the units shown in its menu.

### How it works

Enter incurred losses, loss adjustment expenses, underwriting expenses and earned premiums.

### Tips

- Enter figures for the same period and in the same currency.
- Exchange rates and prices change constantly – update them before you rely on a result.
- Use results as estimates and confirm important figures with the official source.
- Everything runs in your browser – try different values to compare scenarios.

### Common mistakes to avoid

- Mixing gross and net figures.
- Using outdated rates.
- Treating rules of thumb as exact.

### Inputs explained

FieldWhat to enterIncurred lossesAmount in your currencyLoss adjustment expensesAmount in your currencyUnderwriting expenses (commissions, admin)Amount in your currencyEarned premiumsAmount in your currency

### What each result means

- **Loss ratio** = ([Incurred losses] + [Loss adjustment expenses])÷[Earned premiums]×100
- **Expense ratio** = [Underwriting expenses (commissions, admin)]÷[Earned premiums]×100
- **Combined ratio** = [Loss ratio] + [Expense ratio]
- **Underwriting profit (+) or loss (−)** = [Earned premiums] - [Incurred losses] - [Loss adjustment expenses] - [Underwriting expenses (commissions, admin)]

### Example values

How the main result changes when **Incurred losses** changes and everything else stays at the example values above:

Incurred lossesCombined ratio (%)32,500,00065.548,750,00081.7565,000,0009881,250,000114.2597,500,000130.5130,000,000163

## Worked example

Inputs — Incurred losses: $65,000,000; Loss adjustment expenses: $8,000,000; Underwriting expenses (commissions, admin): $25,000,000; Earned premiums: $100,000,000.

Results — Loss ratio = 73 %; Expense ratio = 25 %; **Combined ratio = 98 %**; Underwriting profit (+) or loss (−) = $2,000,000.00; Underwriting result = Profitable (below 100%).

## FAQ

**What is a good combined ratio?**
Below 100%; the lower, the more profitable the underwriting.

**Can an insurer be profitable with a combined ratio above 100%?**
Yes, if investment income covers the underwriting loss.

**What is the loss ratio?**
Claims and claim-handling costs ÷ earned premiums.

**What formula does the Combined Ratio Calculator use?**
Loss ratio = (incurred losses + loss adjustment expenses) ÷ earned premiums.


## Sources

- [NAIC – Insurance industry snapshots](https://content.naic.org/)