(i) Ratio obtained by dividing written premiums by incurred expenses over a given period. This ratio measures the percentage of the premium used to pay all the costs of acquiring, Writing and servicing Insurance policies. (ii) A percentage added to the net premium income to determine the aggregate incurred losses in order to assess a satisfactory excess point for a stop loss Reinsurance contract.
***
Expense ratio is a measure of the level of expenses associated with underwriting activity. It is the ratio of net operating expenses to earned premiums (net of reinsurance).
***
MEDICAL,USA: Percentage that shows the relationship of expenses to earned premiums. This proportion is obtained by using a formula of dividing the premiums into the expenses. It shows the percentage of the premium that is used to pay the overhead costs such as costs of acquiring, writing, commissions, marketing, and servicing by the insurance company.
***
The dollar amount that represents acquisition and service costs, expressed as a percentage of written premium.
***
UK: The fraction arrived at by dividing the amount of premiums into the amount of expenditure.
***
REINSURANCE: The percentage of premium used to pay all the costs of acquiring, writing and servicing insurance and reinsurance.
***
The portion of the premium dedicated to paying the insurer’s expenses. Losses are not included.