Multiple choice

The ratio of losses suffered to the amount of insurance in effect is known as

  1. burning ratio

  2. sum insured

  3. borderline ratio

  4. loss ratio

Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Burning ratio is an insurance-industry calculation of excess losses divided by total subject premium. The burning ratio is an experience-based insurance-rating method commonly used in determining rates for excess of loss reinsurance, or the insurance that insurance companies buy to protect themselves against total claims that exceed their total premiums collected.