Underwriting
Loss Ratio
The ratio of claims paid (losses) to premiums earned, expressed as a percentage. A loss ratio of 60 percent means the insurer paid $0.60 in claims for every $1.00 of premium collected. Carriers use loss ratios to evaluate the profitability of their book of business and to make underwriting and pricing decisions for individual accounts and market segments.
Related terms
Aggregate LimitThe maximum total amount an insurance policy will pay for all covered claims during a single policy ...Experience RatingAn underwriting method that adjusts an insured's premium based on their individual claims history re...UnderwritingThe process by which an insurance carrier evaluates the risk presented by a prospective insured and ...