Work out combined ratio instantly with clear inputs, formula shown and shareable results.
The combined ratio adds the loss and expense ratios: below 100% the insurer makes an underwriting profit, above it an underwriting loss. Subtracting investment income on the float gives the operating ratio, which is why insurers can run above 100% and still be profitable.
Combined ratio
Combined ratio % = Loss ratio + Expense ratio
Operating ratio
Operating ratio % = Combined ratio - Investment income / Earned premium x 100
Indicative estimate only. Fees, entitlements, limits and formulas vary by jurisdiction, statute, policy wording and the facts of the case. This is not legal, tax, insurance or financial advice — confirm with a qualified professional or the relevant authority.
Not necessarily. Long-tail lines hold premium for years and earn investment income on it, so a ratio slightly above 100 can still be economic.
Because it captures the whole underwriting result in one number and is directly comparable across insurers and across years.