# Loss Ratio

- The difference between the ratios of premiums paid to an insurance company and the claims settled by the company. Loss ratio is the total losses paid by an insurance company in the form of claims. The losses are added to adjustment expenses and then divided by total earned premiums. So if a company pays $80 in claims for every $150 in collected premiums, then the company has a loss ratio of 53%.
Loss ratios vary depending on the type of insurance. For example, for health insurance the loss ratio tends to be higher than for property and casualty such as car insurance. This is an indicator of how well an insurance company is doing. This ratio reflects if companies are collecting premiums higher than the amount paid in claims or if it is not collecting enough premiums to cover claims. Companies that have high loss claims may be experiencing financial trouble.

*Investment dictionary.
Academic.
2012.*

### Look at other dictionaries:

**Loss ratio**— in insurance is the ratio of total losses paid out in claims plus adjustment expenses divided by the total earned premiums. [Harvey Rubin, Dictionary of Insurance Terms, 4th Ed. Baron s Educational Series, 2000] If an insurance company, for… … Wikipedia**loss ratio**— loss ra·tio / rā ˌshō, rā shē ˌō/ n: the ratio between insurance losses incurred and premiums earned during a given period Merriam Webster’s Dictionary of Law. Merriam Webster. 1996 … Law dictionary**loss ratio**— n. the ratio between the losses incurred and the premiums earned by an insurance company during a specified time … English World dictionary**loss ratio**— The total of the claims paid out by an insurance company, underwriting syndicate, etc. , expressed as a percentage of the amount of premiums coming in in the same period. For example, if claims total £2M and premiums total £4M, the result is a… … Big dictionary of business and management**loss ratio**— draudimo nuostolingumas statusas Aprobuotas sritis draudimo veikla apibrėžtis Išmokų sąnaudų ir uždirbtų įmokų santykis. atitikmenys: angl. loss ratio šaltinis Lietuvos Respublikos draudimo priežiūros komisijos 2004 m. spalio 1 d. nutarimas Nr. N … Lithuanian dictionary (lietuvių žodynas)**loss ratio**— loss′ ra tio n. bus the ratio of the losses paid by an insurer to premiums earned for a given period • Etymology: 1925–30 … From formal English to slang**loss ratio**— Terminology of insurers; a ratio arrived at by measuring losses incurred, plus loss adjustment expenses, incurred against premiums earned. See premium earned … Ballentine's law dictionary**loss ratio**— noun the ratio of the annual claims paid by an insurance company to the premiums received • Hypernyms: ↑ratio … Useful english dictionary**loss ratio**— noun Date: 1926 the ratio between insurance losses incurred and premiums earned during a given period … New Collegiate Dictionary**loss ratio**— Insurance. the ratio of the losses paid or accrued by an insurer to premiums earned, usually for a period of one year. [1925 30] * * * … Universalium