Insurance Expense Ratio

For a property-and-casualty insurer, the share of premium consumed by the cost of running the business -- commissions to agents and brokers, underwriting salaries, and general overhead -- as a percentage. It is the smaller of the two components of the combined ratio (the loss ratio being the larger). A lower expense ratio signals operating efficiency and scale, and it is one of the clearest levers a well-run insurer pulls to stay profitable when loss costs rise. (Distinct from a fund's expense ratio, which is an asset-management fee.)

Related terms

Absorption Rate · AFFO per Share · Allowed Return on Equity · Alternative Investments · Anchor Tenant · Assets Under Management

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