This represents the percentage of a company’s net premium written that went toward underwriting expenses such as commission to agents and brokers, state and municipal taxes, salaries, employee benefits and other operating costs. The ratio is computed by dividing underwriting expenses by net premiums written. A company with an underwriting expenses ratio of 31.3% is spending more than 31 rupee of every Rs. 100 of net premium written to pay underwriting costs. It should be noted that different lines of business have intrinsically differing expense ratios.