How to calculate combined ratio?

The formula used for combined ratio calculation is represented as below: Combined Ratio = Underwriting Loss Ratio + Expense Ratio You are free to use this image on your website, templates, etc, Please provide us with an attribution link where,

What is the difference between loss ratio and combined ratio?

The loss ratio measures the total incurred losses in relation to the total collected insurance premiums, while the combined ratio measures the incurred losses and expenses in relation to the total collected premiums. The combined ratio is essentially calculated by adding the loss ratio and expense ratio.

Can a company have a combined ratio above 100%?

So a company can have a combined ratio above 100% but still be profitable overall because there could be sizable additional revenues from investments. The more detailed formula for combined ratio breaks out expenses to include the following: Combined Ratio = (Incurred Losses + Loss Adjustment Expenses + Other Underwriting Expenses)/Earned Premiums