Work out expense ratio for insurance instantly with clear inputs, formula shown and shareable results.
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.
Ratios
Expense ratio = Expenses / Premium; Combined = Loss ratio + Expense ratio
Not necessarily overall — investment income on reserves can still make the year profitable, though the underwriting itself lost money.
Expense ratios are often quoted on written premium in the US and on earned premium elsewhere; keep the basis consistent when comparing.