What Does Current Liquidity Mean?

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What does Current Liquidity mean? Read on to discover the definition & meaning of the term Current Liquidity - to help you better understand the language used in insurance policies.

Current Liquidity

Current Liquidity

Current liquidity is the ratio of the total amount of cash and other ready resources or cash equivalents to the total liabilities of an insurance company. It is a measure of the ability of an insurer to respond to substantial claims against it on the policies that it has written. It is a gauge of financial strength. If this ratio is less than 100 percent, the solvency of the company is dependent on the collection of premiums.

We hope the you have a better understanding of the meaning of Current Liquidity.

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