Combined Ratio
The single most important profitability measure for a property-and-casualty insurer: the sum of the loss ratio and the expense ratio, shown as a percentage. It answers "for every premium dollar, how many cents went out the door on claims and expenses?" Below 100% means the insurer made an underwriting profit -- it collected more in premiums than it paid out; above 100% means it lost money on underwriting and is relying on investment income to make up the difference. A few points' move in the combined ratio swings earnings dramatically. Insurers report it on a calendar-year (as-reported) basis and often an underlying/ex-catastrophe basis; compare like with like.
Related terms
Absorption Rate · AFFO per Share · Allowed Return on Equity · Alternative Investments · Anchor Tenant · Assets Under Management
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