What two components make up the combined ratio?

Loss ratio and expense ratio — The combined ratio is simply the loss ratio plus the expense ratio, both measured as a percentage of premium.

What does a combined ratio above 100% indicate?

The underwriting result itself was a loss, though investment income could still offset it — A combined ratio above 100% means underwriting itself lost money, but the company as a whole might still be profitable once investment income is added.

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Combined Ratio

Loss ratio plus expense ratio

The sum of the loss ratio and the expense ratio — the single most common shorthand for whether an underwriting book is profitable before investment income.

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Related terms

Part of the Treaty Reinsurance guide, where this term is explained alongside every other treaty metric.