Free · Insurance financial ratios

Insurance Combined Ratio on One Premium Basis

Compare claims, loss-adjustment expenses and underwriting expenses with one entered premium denominator.

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Calculator inputs

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How to use this calculator

  1. Enter the known values in the units shown. Results update as you type.
  2. Where results are editable, change one to solve backwards. Lock a value to hold it fixed.
  3. Use the worked example to check the method. Reset restores the starting fields.

Use the result with context

Results are estimates for planning and education. Confirm rates, taxes, fees, and legal requirements with the relevant institution or a qualified professional before making a financial decision.

Formula and method

Claims of 600, adjustment expenses of 100 and underwriting expenses of 200 against premiums of 1,000 give a combined ratio of 90%.

Combined ratio = (claims + loss-adjustment expenses + underwriting expenses) / premiums

Worked example

Enter these known values and leave the other values blank.

Incurred claim losses
600 USD
Loss-adjustment expenses
100 USD
Underwriting expenses excluding losses
200 USD
Premiums — chosen consistent basis
1000 USD
Losses including adjustment expenses
700 USD
Combined ratio on that basis
90 %

Assumptions and limitations

  • All costs are nonnegative and premiums must be positive. Use comparable periods and consistent gross or net-of-reinsurance amounts.
  • This model puts all expenses over one premium denominator. Some reported combined ratios divide underwriting expenses by written premiums and losses by earned premiums; those conventions may produce a different number.
  • Avoid counting loss-adjustment costs twice in the claim-loss and adjustment-expense fields. This calculation does not establish total company profitability.
  • Use consistent currencies, periods and amount scales. Currency selectors use fixed captured exchange rates, not current market rates.

Common questions

Can an insurer have a ratio over 100% and still report net income?

Yes. Investment income and other items can differ from underwriting results.

Why might my reported combined ratio differ?

Check premium bases, expense classifications, reinsurance treatment and reporting period.

References

Compare the ratio with 100% precisely and describe the included underwriting balance without assuming total profitability.

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