Question

The measure of an insurance angle is ___the measure of the are intercepted it.​

Answer 1

Step-by-step explanation:

The combined ratio measures the money flowing out of an insurance company in the form of dividends, expenses, and losses. Losses indicate the insurer's discipline in underwriting policies. The expense ratio gauges the efficiency of an insurer and how well it uses its resources to drive top-line growth. The combined ratio is arguably the most important of these three ratios because it provides a comprehensive measure of an insurer's profitability.

The combined ratio is typically expressed as a percentage. A ratio below 100 percent indicates that the company is making an underwriting profit, while a ratio above 100 percent means that it is paying out more money in claims that it is receiving from premiums. Even if the combined ratio is above 100 percent, a company can potentially still be profitable because the ratio does not include investment income.

Many insurance companies believe that the combined ratio is the best way to measure success because it does not include investment income and only includes profit earned through efficient management. This is important to note since a portion of dividends will be invested in equities, bonds, and other securities. The investment income ratio (investment income divided by net premiums earned) takes investment income into account and is used in the calculation of the overall operating ratio.

KEY TAKEAWAYS

The combined ratio is a measure of profitability used by an insurance company to gauge how well it is performing in its daily operations.

The combined ratio is typically expressed as a percentage.

A ratio below 100 percent indicates that the company is making an underwriting profit, while a ratio above 100 percent means that it is paying out more money in claims that it is receiving from premiums.

Many insurance companies believe that the combined ratio is the best way to measure success because it does not include investment income and only includes profit earned through efficient management.