Combined Ratio

The combined ratio is mainly calculated by adding the loss ratio and the cost ratio. The loss ratio is calculated by dividing the total losses by the total insurance premiums collected. The lower the share, the more profitable the insurance company and vice versa.

Other financial terms related to Combined Ratio

Surplus

The surplus is the amount by which the insurer's assets exceed its liabilities.

Dividend

Dividend is the repayment of part of the premium that the insured pays from the insurance surplus.

Capital

Capital is a term for a company's, or private person's, total resources. This can be, for example, money, assets, machinery and buildings.