Insurance Combined Ratio Calculator
Measure underwriting profitability from loss ratio and expense ratio. Complete with interpretation, a two-company comparator, and component breakdown.
Please note: results on this page are educational estimates — not financial, investment, or insurance advice.
Basic Combined Ratio
Enter paid claims, underwriting expenses, and net premiums for the same period.
Please note: the results above are educational estimates — not financial, investment, or insurance advice.
Combined Ratio Interpretation
Drag or type a combined ratio to see what it means.
| Range (illustrative) | Meaning |
|---|---|
| Below 95% | Very efficient — wide underwriting margin |
| 95% – 100% | Underwriting profit |
| Exactly 100% | Underwriting break-even |
| 100% – 105% | Mild underwriting loss |
| Above 105% | Significant underwriting loss |
The ranges above are a general picture often used by analysts for illustration, not an official regulatory standard.
Please note: this interpretation is educational — not financial, investment, or insurance advice.
Two-Company Comparator
Compare the underwriting efficiency of two companies or two product lines.
Company A
Company B
| Metric | A | B |
|---|---|---|
| Loss ratio | – | – |
| Expense ratio | – | – |
| Combined ratio | – | – |
| Margin underwriting | – | – |
Please note: this comparison is an educational estimate — not financial, investment, or insurance advice.
Component Breakdown
See the composition of every Rp100 of premiums: the claims, expense, and underwriting margin portions.
Please note: this visualization is an educational estimate — not financial, investment, or insurance advice.
Methodology
expense ratio = (underwriting expenses ÷ premiums) × 100%
combined ratio = loss ratio + expense ratio
underwriting margin = 100% − combined ratio
Verified example: claims Rp700,000,000, underwriting expenses Rp250,000,000, net premiums Rp1,000,000,000.
- Loss ratio = 700,000,000 ÷ 1,000,000,000 × 100% = 70%
- Expense ratio = 250,000,000 ÷ 1,000,000,000 × 100% = 25%
- Combined ratio = 70% + 25% = 95% → underwriting profit
- Underwriting margin = 100% − 95% = 5%
Use premiums and claims from the same accounting period (e.g. net premiums for the current year). Underwriting expenses include commissions, policy acquisition, and administration — not investment expenses.
Frequently asked questions
What is combined ratio in insurance?
Combined ratio is an insurance company's underwriting profitability metric, computed as loss ratio plus expense ratio. The formula: combined ratio = (claims ÷ premiums) × 100% + (underwriting expenses ÷ premiums) × 100%. A figure below 100% means underwriting profit, while a figure above 100% means underwriting loss.
How do I calculate combined ratio? Give an example.
Example: a company pays claims of Rp700,000,000, has underwriting expenses of Rp250,000,000, and collects net premiums of Rp1,000,000,000. Loss ratio = 700,000,000 ÷ 1,000,000,000 × 100% = 70%. Expense ratio = 250,000,000 ÷ 1,000,000,000 × 100% = 25%. Combined ratio = 70% + 25% = 95%, with an underwriting margin of 5%.
What does a combined ratio below 100% mean?
A combined ratio below 100% means the company records underwriting profit: total claims and expenses are smaller than the premiums collected. The difference, i.e. 100% minus the combined ratio, is the underwriting margin. For example, a combined ratio of 95% means an underwriting margin of 5%.
Does a combined ratio above 100% mean the insurer is definitely losing money?
Not necessarily. A combined ratio above 100% means a loss on the underwriting side, but insurers also earn investment returns from premium funds managed before claims are paid. These investment returns can cover the underwriting loss so that overall net profit stays positive.
What is the difference between loss ratio and expense ratio?
Loss ratio measures claims paid relative to premiums: (claims ÷ premiums) × 100%. Expense ratio measures underwriting operating expenses such as agent commissions, policy acquisition, and administration, relative to premiums: (expenses ÷ premiums) × 100%. The sum of the two is the combined ratio.
Is this calculator's result financial advice?
No. This calculator provides an educational estimate based on the numbers you enter and is not financial, investment, or insurance advice. For financial decisions, consider consulting a licensed financial planner.