What is the insurance metric that adds the loss ratio and expense ratio?

The combined ratio is the insurance metric formed by adding an insurer’s loss ratio and expense ratio.

It measures underwriting performance in property and casualty insurance. The loss ratio compares claims and related loss-adjustment expenses with earned premiums, while the expense ratio compares operating expenses with premiums. Together, they show how much of each premium dollar is consumed by underwriting costs.

A combined ratio below 100% generally indicates an underwriting profit, while a ratio above 100% indicates an underwriting loss before investment income. Investment returns can still make an insurer profitable even when its combined ratio exceeds 100%.

The metric is not normally used as the main performance measure for life insurance, whose economics depend on mortality, investment returns, reserves, and long-term policy behavior.