Insurance Combined Ratio Calculator
The combined ratio is the headline measure of underwriting performance: total claims and operating costs as a share of premium. It adds the loss ratio to the expense ratio. Below 100% the book makes an underwriting profit; above 100% it makes an underwriting loss before investment income. This calculator returns the loss ratio, the expense ratio, and the combined total.
Combined ratio formula
Loss ratio = (incurred losses + loss adjustment expense) / earned premium * 100
Expense ratio = underwriting expenses / earned premium * 100
Combined ratio = loss ratio + expense ratio
A combined ratio below 100% is an underwriting profit; above 100% is an underwriting loss before investment income.
Reading the result
- The loss ratio shows the claims burden as a share of premium.
- The expense ratio shows operating cost as a share of premium.
- The combined ratio adds the two; the 100% line separates profit from loss.
- Investment income can still make a book with a combined ratio above 100% profitable overall.
Combined ratio: frequently asked questions
What is the combined ratio?
The combined ratio is the loss ratio plus the expense ratio. It measures total underwriting cost as a share of premium: losses, the cost of settling them, and the cost of running the business, all divided by premium. Below 100% the insurer made an underwriting profit; above 100% it made an underwriting loss.
Does a combined ratio above 100% mean the insurer lost money?
Not necessarily overall. A combined ratio above 100% is an underwriting loss, but insurers also earn investment income on the premiums they hold. A company can post a combined ratio over 100% and still be profitable once investment returns are included. The combined ratio isolates the underwriting side.
How is the combined ratio split?
It is the loss ratio (incurred losses plus loss adjustment expense over premium) plus the expense ratio (underwriting expenses over premium). This calculator shows both components and the total so you can see whether claims or expenses are the larger driver.
What is a strong combined ratio?
A combined ratio comfortably below 100% indicates profitable underwriting, with lower being stronger. The right benchmark varies by line of business and market cycle, since some lines run thin underwriting margins and rely more on investment income.
Sources and method
- The combined ratio is the standard underwriting identity: loss ratio plus expense ratio. All inputs are user-editable; no figure is hardcoded.
- National Association of Insurance Commissioners: NAIC for insurance financial reporting concepts.
Reviewed by the CalculatorHub team, edited by James Graham, 19 June 2026. See our methodology.