What Does Loss Ratio Mean?

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

Loss Ratio

Loss Ratio

The loss ratio is the percentage of the total claims paid by an insurance company in relation to the total premiums received during the course of a year. This percentage represents how well the company is performing. It reflects whether the company is collecting enough premiums to meet its obligations and operational commitments or under charging to the point of operating at a loss.

We hope the you have a better understanding of the meaning of Loss Ratio.

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