Multiple choice general knowledge

Loss Ratio is a ratio of claims to which of the following?

  1. Part of annuity payment

  2. Operating expenses

  3. Premiums

  4. Invoices

Reveal answer Fill a bubble to check yourself
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.