Loss Ratio (P&C)

Benchmarking Report

Loss Ratio (P&C)

This PDF report includes benchmarking data (in a visual, chart-based format), an comprehensive KPI definition, characteristics of high performers and technical details on measuring Loss Ratio (P&C). Purchase and download this easy-to-understand, presentation-ready report immediately to compare performance levels, set attainable performance targets, and push towards best-in-class performance for this KPI.


What is Loss Ratio (P&C)?

The total amount of property and casualty (P&C) insurance claims paid out to policyholders plus any loss adjustment expenses (LAE) divided by total P&C premium earned over the same period of time, as a percentage. Loss Ratio is a publicly-reported metric (for any publicly-traded insurance company)

Why should Loss Ratio (P&C) be measured?

Loss Ratio is a major, industry-standard measure of an insurer's overall profitability and the procedures/processes they have in place to manage overall paid losses (and related loss adjustment expenses). Loss Ratio is typically a publicly-reported metric (for any publicly-traded insurance company), so poor performance can negatively impact an insurance company's market value. There are several factors that can drive high Loss Ratios: relatively high claims and loss adjustment labor costs (i.e., costs for loss adjusters, claims employees, etc.), subpar underwriting guidelines and rules (i.e., the company is onboarding high risk policyholders), poor claims estimation and adjustment processes, and extended claims cycle times are known to increase paid losses. A higher-than-usual amount of catastrophe losses (e.g., hurricanes, etc.) can also increase paid losses. Insurance firms typically analyze claims processes regularly to reduce "claims leakage" and drive down Loss Ratios.


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