📊 Loss Ratio Calculator
Calculate the loss ratio for an insurance book of business to see what share of premium is being paid out in claims.
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What is a Loss Ratio?
The loss ratio is a core insurance metric that compares the losses an insurer pays out in claims to the premiums it earns. It’s used to gauge the underwriting profitability of a policy, product line, or entire book of business.
The Formula
Loss Ratio = (Incurred Losses ÷ Earned Premiums) × 100. A ratio below 100% generally means premiums collected exceeded claims paid, before accounting for expenses; a ratio above 100% signals the business paid out more in claims than it earned in premium.
Note: This is a simplified educational calculation; real insurance analysis also considers expense ratios, reserves, and reinsurance.
Last reviewed August 2026