Work out insurance loss ratio (safety) instantly with clear inputs, formula shown and shareable results.
Loss ratio is incurred losses, claims paid plus reserves for open claims, divided by premiums earned. It is the number that drives renewal pricing, so a safety programme that reduces claims shows up here before it shows up in premium. Above about seventy percent an insurer is losing money once expenses are added.
Loss ratio
Loss ratio = (claims paid + reserves) / premiums earned x 100
Loss ratio = (claims paid + reserves) / premiums earned x 100. Loss ratio is incurred losses, claims paid plus reserves for open claims, divided by premiums earned.
Because liability claims take years to settle. Judging a year on paid claims alone flatters recent periods and understates the true cost of injuries already sustained.
This calculator takes 3 inputs: Claims paid, Reserves for open claims, Premiums earned. The pre-filled defaults are a realistic worked example — replace them with your own site or project figures.