📚 Insurance calculators
The insurance calculators cluster covers underwriting and agency math: loss ratio, combined ratio (COR), expense ratio, retention ratio, close rate, quote-to-bind rate, claims closure rate, premium growth rate, lapse rate, loss adjustment expense (LAE) ratio, pure loss ratio, claim frequency rate, average severity, hit ratio, premium per policy, claims per thousand, unpaid claims ratio, and commission ratio—each on a single-intent URL.
Run insurance underwriting and agency KPI math in one place: loss ratio, combined ratio, expense ratio, retention, close rate, quote-to-bind, claims closure, premium growth, lapse rate, and LAE ratio—plus Wave 2 tools for pure loss ratio, claim frequency, average severity, hit ratio, premium per policy, claims per thousand, unpaid claims ratio, and commission ratio. Keep statutory and management definitions identical to the calculator labels.
Key facts
| Primary audience | Underwriters, agency managers, claims ops, and insurance finance analysts |
|---|---|
| Core formulas | Loss/COR/expense ratios, frequency & severity, hit & commission ratios, retention & lapse, close/bind rates |
| Category | Insurance / underwriting / agency |
| Related hubs | Finance; Business; Professional KPIs |
Definitions
Loss ratio
Incurred losses divided by earned premium—core underwriting profitability for a book or period.
Combined ratio (COR)
Losses plus underwriting expenses relative to earned premium; under 100% generally means underwriting profit.
Retention ratio
Share of policies or premium renewed (or kept) versus the renewal-eligible base for the period.
Frequency vs severity
Frequency is claims relative to exposures; severity is average dollars per claim—pair them to explain loss ratio moves.
Formulas
- Loss ratio %: (incurred losses ÷ earned premium) × 100
- Combined ratio %: ((losses + expenses) ÷ earned premium) × 100
- Expense ratio %: (underwriting expenses ÷ earned premium) × 100
- Retention %: (renewed ÷ renewal-eligible) × 100
- Close rate %: (bound ÷ quotes or opportunities) × 100
- Lapse rate %: (lapsed ÷ in-force or eligible) × 100
- Pure loss ratio %: (losses excl. LAE ÷ earned premium) × 100
- Claim frequency %: (claims ÷ earned exposures) × 100
- Average severity: incurred losses ÷ claims
- Hit ratio %: (bound policies ÷ submissions) × 100
- Premium per policy: premium ÷ policies
- Claims per thousand: (claims ÷ exposures) × 1000
- Unpaid claims %: (open unpaid ÷ claims inventory) × 100
- Commission ratio %: (commissions ÷ written premium) × 100
Comparison table
| Topic | Guidance |
|---|---|
| Loss vs combined ratio | Loss ratio is claims vs premium; COR adds expenses—both use earned premium for standard comparisons. |
| Retention vs lapse | Retention measures what stayed; lapse measures what left—they are related but not always exact complements. |
| Close vs quote-to-bind | Close rate may use opportunities; quote-to-bind is specifically quotes that became bound policies. |
| Hit ratio vs quote-to-bind | Hit ratio starts at submissions; quote-to-bind starts at issued quotes—different funnel stages. |
| Frequency vs severity | Frequency is claim count vs exposures; severity is dollars per claim—loss ratio often moves with both. |
| Pure LR vs all-in LR | Pure loss ratio excludes LAE from the numerator; standard loss ratio may include LAE per your definition. |
Glossary references
Reinforce entities by pairing percent language with conversion pages when learners mix fractions, decimals, and ratios.
❓ Frequently Asked Questions
What is a good combined ratio?
Under 100% typically means underwriting profit before investment income. Targets vary by line, market cycle, and whether expenses are statutory or management.
Written or earned premium?
Standard loss, expense, and combined ratios use earned premium. Written premium needs a labeled written ratio. Commission ratios commonly use written premium.
What did Wave 2 add for frequency, severity, hit ratio, and commission?
Pure loss ratio, claim frequency rate, average severity, hit ratio, premium per policy, claims per thousand exposures, unpaid claims ratio, and commission ratio.
Do these replace statutory filings?
No. They compute educational formulas from your inputs—carrier systems and regulators remain authoritative.