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Combined Ratio Calculator

Work out combined ratio instantly with clear inputs, formula shown and shareable results.

About Combined Ratio Calculator

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.

Formulas

Combined ratio

Combined ratio % = Loss ratio + Expense ratio

Operating ratio

Operating ratio % = Combined ratio - Investment income / Earned premium x 100

Worked example

With the default values below, Combined Ratio Calculator returns Combined ratio of 99.00%. Change any input above and every figure here is recalculated in your browser.

Inputs used

Incurred losses and LAE
73,000,000
Underwriting and acquisition expenses
26,000,000
Earned premium
100,000,000
Investment income on float
7,000,000

Results

Combined ratio
99.00%
Loss ratio
73.00%
Expense ratio
26.00%
Operating ratio after investment income
92.00%

Step by step

  1. 1Values used
  2. 2Combined ratio
  3. 3Operating ratio
  4. 4Combined ratio= 99.00
  5. 5Loss ratio= 73.00
  6. 6Expense ratio= 26.00
  7. 7Operating ratio after investment income= 92.00

Assumptions and limits

  • The result is derived only from the 4 inputs listed above. Anything not among them is not part of the calculation.
  • In particular, this calculator does not take inflation, tax or compounding frequency into account.
  • Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
  • 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.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

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.

Frequently Asked Questions

Is a combined ratio above 100% always bad?

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.

Why is the combined ratio the headline insurance metric?

Because it captures the whole underwriting result in one number and is directly comparable across insurers and across years.

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