Loss Ratio is a ratio of claims to which of the following?
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Part of annuity payment
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Operating expenses
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Premiums
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Invoices
C
Correct answer
Explanation
Loss ratio is calculated as (claims incurred) divided by (premiums earned). It is a key metric showing what percentage of premium income is being paid out in claims. A ratio above 100% means the insurer is paying more in claims than it collects in premiums.