Definition for : Combined ratio

The sum of claims and Operating expenses as a percentage of total Premiums collected by the Insurance company. If the percentage exceeds 100%, the Insurance company will be unable to make a Profit, except if its financial products (dividends, Interest, rent and capital gains) set off the shortfall between Premium Income and the sum of claims and Operating expenses. It is a way of measuring the efficiency of the Insurance company's management.
To know more about it, look at what we have already written on this subject