Insurance companies sometimes refer to another company’s combined ratio. Is that important?
A. The combined ratio is the sum of the combined loss ratio, expense ratio and dividend ratio for a given time period. A combined ratio above 100 indicates that a carrier is paying out more in claims and expenses than it is receiving in premiums. A company with a combined ratio higher than 100 still can be profitable because of investment income. NYSIR’s combined ratio over the past several years has been well under the industry average.
