Underwriting Expense Ratio
Updated: 09 June 2023
What Does Underwriting Expense Ratio Mean?
The underwriting expense ratio is a mathematical calculation used to gauge an insurance company's underwriting success. The formula involves dividing underwriting expenses by total premiums earned to arrive at the percentage of premiums spent on underwriting expenses.
Insuranceopedia Explains Underwriting Expense Ratio
Insurance companies use the underwriting expense ratio to make sure that they are not spending too much money paying out claims and other underwriting expenses. If they are, then that means that they could be decreasing in profitability. So essentially, this figure serves as an indicator of whether the insurer is on the right track to maintain financial solvency and garner profit. Investors also look at this number before investing in a company.
Related Definitions
Related Terms
Related Articles
Insurance Industry Careers: What They Are and How to Get Them
The Future of Insurtech: How Technology is Transforming the Insurance Industry
Inside the Details of Auto Transport Insurance: An Expert Interview
Expert Insights: The Ins and Outs of Moving Insurance
Interview With Todd Taylor On Strategizing Large Group Health Insurance
Future Trends in Pain Management Billing and Insurance: Adapting to Change
Related Reading
Revealing the Most And Least Popular U.S. Insurance Companies
How to Get Into the Insurance Industry With a Finance Degree