Combined Ratio

RECENT NEWS
Insurance Journal  Feb 10  Comment 
A relatively quiet year for catastrophes helped the U.S. property/casualty industry achieve an underwriting profit for the first time in four years, according to A.M. Best. The industry managed its way to a nearly 60 percent increase in net income...
Insurance Journal  Jun 14  Comment 
Workers’ compensation, the largest commercial lines segment representing approximately 18 percent of commercial lines net written premiums in 2011, posted a statutory combined ratio of 117 percent in 2011, according to a new report by Fitch...
Insurance Journal  Feb 6  Comment 
The U.S. property/casualty (P/C) industry reported its largest underwriting loss since 2006 and saw its operating performance deteriorate sharply in 2011, as catastrophe-related losses throughout the year wreaked havoc. Insurers were affected by...
Insurance Journal  Aug 4  Comment 
Swiss Re reported Group net income increased by 18 percent to $960 million in the second quarter of 2011, compared to $812 million in the same period of 2010. “All segments contributed to these positive results, which translate into a …
Insurance Journal  Nov 2  Comment 
State Auto Financial Corp., headquartered in Columbus, Ohio, reported third quarter 2010 net income of $0.2 million, or $0.00 per diluted share, versus net income of $13.0 million, or $0.33 per ...
Insurance Journal  May 11  Comment 
As workers' compensation premiums continued to decline in 2009, the combined ratio jumped nine points in 2009. According to recent report on the state of the workers' comp market, the combined ...
Insurance Journal  Apr 15  Comment 
The U.S. property/casualty industry's profitability as measured by their rate of return on average policyholders' surplus (or statutory net worth) increased by 5.8 percent in 2009, while private ...
Insurance Journal  Feb 2  Comment 
Munich Re announced that according to its "preliminary calculations" consolidated profits increased "significantly" in 2009 to €2.56 billion [$3.57 billion, compared to €1.58 billion ...
Insurance Journal  Dec 22  Comment 
Private U.S. property/casualty insurers’ net income after taxes rose to $16.2 billion through nine-months 2009, partially recovering from the 91.2 percent decline to $4.4 billion through ...
Insurance Journal  Jul 31  Comment 
The Hartford reported a second quarter 2009 net loss of $15 million compared with second quarter 2008 net income of $543 million. Even so, Ramani Ayer, chairman and chief executive officer of The ...




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This is calculated by dividing overall operating expenses (losses incurred + other operating expenses) by Premiums Earned, expressed as a percentage.

This metric is useful to determine and compare the profitability between insurance companies. A combined ratio of less than 100% means that the company is profitable, as its premiums earned are greater than its total expenses. For example, an insurer with $800 in expenses and $1,000 in premiums earned has a combined ratio of 80% (800/1000). However, companies with combined ratios over 100% may still earn a profit because the ratio does not account for Investment Income.

Lower combined ratios signal that the company is more profitable than competitors with higher combined ratios.

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