loss ratio

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Related to Actual Loss Ratios: Paid Loss Ratio
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  • noun

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the ratio of the annual claims paid by an insurance company to the premiums received

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References in periodicals archive ?
Column 2 shows the relative volatility in the expected loss ratios to the actual loss ratios, and column 3 shows the relative volatility in the computed normal losses to the actual losses.
For example, the relative values of the actual loss ratios to the estimated loss ratios (dividing column 2 by column 3) are 1.
At the end of each period, the Insurance Services Office (an independent actuarial organization) calculates the actual loss ratios, and property and casualty underwriters then incur gains or losses as they sell catastrophe futures contracts previously purchased.
Now suppose that six months later, the actual loss ratio on the healthcare index was 75% instead of 65%, due to an unexpected increase in AIDS-related costs, or an unexpected outbreak of a new strain of flu.
Underwriters and others that make up the market for these contracts will form expectations regarding the actual loss ratios on future quarters.