What insurance ratio is (incurred losses plus expenses) divided by earned premiums?

The insurance ratio equal to (incurred losses plus expenses) divided by earned premiums is the combined ratio.

Used mainly for property-and-casualty insurance, the combined ratio joins the loss ratio and expense ratio. It compares claims costs and underwriting expenses with the premiums earned for providing coverage during the period. If losses are 70% of premiums and expenses are 25%, the combined ratio is 95%.

A result below 100% generally indicates an underwriting profit, while a result above 100% indicates an underwriting loss before investment income. Insurers can still be profitable overall with a combined ratio above 100% if returns from investing premiums offset the underwriting deficit.

The denominator is earned premiums, not necessarily premiums written during the same period. Incurred losses can include amounts paid plus changes in claim reserves, and some presentations include loss-adjustment expenses or policyholder dividends. That is why reported versions should be compared only when their accounting basis matches.