What does Expected Loss Ratio mean? Read on to discover the definition & meaning of the term Expected Loss Ratio - to help you better understand the language used in insurance policies.
Expected Loss Ratio
An expected loss ratio is a way of determining how much money earned from premiums an insurer should set aside to pay for future claims. The amount is not fixed, but based on probability and actuarial forecasts that attempt to predict the number and severity of claims the insurer will have to pay.
We hope the you have a better understanding of the meaning of Expected Loss Ratio.