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the combine ratio is used by a company to judge how well it is performing in its daily operation the combine ratio also called operating ratio correspond to the arithmetic sum of two ratios the incurred loss to hand premium and inky expenses to return premium it is considered as the best and simple index to measure current underwriting performance of an injury or injury and provides a comprehensive overview of an interior insurance profitability as well as measles the money flowing out in a company in the form of dividends expenses or losses the combined ratio is calculated by taking the sum of the incurred losses and expenses and then dividing then by premium the combine ratio is used by a company to judge how well it is performing in its daily operation the combined ratio is calculated by taking the sum of incurred losses and expenses the combined ratio formula is equal to claims paid plus reserve if any divided by the on premiere
