• The combined ratio is a measure of profitability used by an insurance company to evaluate how well it performs in its day-to-day operations.

  • The total coefficient is usually expressed as a percentage.
  • A ratio below 100% indicates that the company is making a profit from underwriting, while a ratio above 100% means it is paying out more money on claims than it is getting from premiums.
  • Many insurance companies believe that the combined ratio is the best way to measure success, because it does not include investment income, but only profits made through effective management.