Combined Ratio
The Combined Ratio is a measure of profitability used by an insurance company to indicate how well it is performing in its daily operations. Typically expressed as a percentage, a ratio below 100% indicates that the company is making underwriting profit, while a ratio above 100% means that it is paying out more money in claims than it is receiving from premiums. Even if the Combined Ratio is above 100%, a company can potentially still make a profit, because the ratio does not include the income received from investments.
Calculated as: Loss Ratio + Expense Ratio