Loss Ratio Calculator

About this calculator

The loss ratio is one of the core profitability metrics in insurance, calculated as claims paid divided by premiums earned over the same period. A loss ratio well below 100% means the insurer is collecting more in premiums than it pays out in claims, leaving room to cover operating expenses and profit; a ratio pushing toward or above 100% signals that a line of business is losing money on underwriting alone.

Insurers, reinsurers, and regulators track loss ratios by product line, region, or policy cohort to price policies correctly, decide where to tighten underwriting standards, and flag lines of business that need a rate increase. Investors and analysts also watch loss ratio trends as a direct signal of underwriting discipline, separate from investment income that can mask an underlying underwriting problem.