Definition, Meaning & Synonyms
claims-ratio
noun
/kleɪmz ˈreɪʃioʊ/
Definition
The claims ratio is a financial metric used primarily in the insurance industry to measure the proportion of claims paid out to the premiums earned by an insurance company.
Examples
- The claims-ratio of the company improved over the last fiscal year.
- A high claims-ratio may indicate that an insurance company is at risk of losing money.
- Investors often analyze the claims-ratio to assess the profitability of an insurer.
Meaning
It indicates the company’s ability to cover its claims with the income from policies sold.
Synonyms
- loss ratio
- claims-to-premiums ratio
