Expense Ratio For Insurance Calculator

Work out expense ratio for insurance instantly with clear inputs, formula shown and shareable results.

About Expense Ratio For Insurance Calculator

The expense ratio measures acquisition and administration costs against earned premium. Added to the loss ratio it gives the combined ratio: below 100% the book makes an underwriting profit before investment income.

Formula

Ratios

Expense ratio = Expenses / Premium; Combined = Loss ratio + Expense ratio

Worked example

With the default values below, Expense Ratio For Insurance Calculator returns Expense Ratio of 20.000%. Change any input above and every figure here is recalculated in your browser.

Inputs used

Earned Premiumminimum 0: 12,000,000
Underwriting Expensesminimum 0: 2,400,000
Incurred Lossesminimum 0: 8,100,000

Results

Expense Ratio: 20.000%
Loss Ratio: 67.500%
Combined Ratio: 87.500%
Underwriting Result: $1,500,000.00

Step by step

1Values used
2Ratios
3Expense Ratio= 20.000
4Loss Ratio= 67.500
5Combined Ratio= 87.500
6Underwriting Result= 1,500,000.00

Assumptions and limits

The result is derived only from the 3 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 3 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.

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

Frequently Asked Questions

Is a combined ratio above 100% always a loss?

Not necessarily overall — investment income on reserves can still make the year profitable, though the underwriting itself lost money.

Should the ratio use written or earned premium?

Expense ratios are often quoted on written premium in the US and on earned premium elsewhere; keep the basis consistent when comparing.