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- Using outdated rates.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
| Field | What to enter |
|---|---|
| Incurred losses | Amount in your currency |
| Loss adjustment expenses | Amount in your currency |
| Underwriting expenses (commissions, admin) | Amount in your currency |
| Earned premiums | Amount 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 losses | Combined ratio (%) |
|---|---|
| 32,500,000 | 65.5 |
| 48,750,000 | 81.75 |
| 65,000,000 | 98 |
| 81,250,000 | 114.25 |
| 97,500,000 | 130.5 |
| 130,000,000 | 163 |
Formula
Loss ratio = (incurred losses + loss adjustment expenses) ÷ earned premiumsExpense ratio = underwriting expenses ÷ earned premiums (or written premiums)Combined ratio = loss ratio + expense ratioWorked 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%).
Frequently asked questions
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.