WC Results

Combined Ratio
An indication of an insurance company’s health

      A combined ratio above 100 indicates that a carrier is paying out more in claims and expenses than it is taking in premiums. Carriers often consider it a more appropriate indicator of company performance than earnings because earnings also include profits on the company’s investments. A company with higher than 100-combined ratio can still be profitable because of investment income.

      The combined ratio is the sum of the combined loss ratio, expense ratio and dividend ratio for a given time period. The formula is [(Loss + Loss Adjustment Expense)/Earned Premium] + [Underwriting Expenses/Written Premium] + [Dividends to Policyholders/Earned Premium].

Calendar Year

Accident Year

Notes to charts:
Countrywide ratios are for private carriers on a net basis.
State ratios are on a direct basis. Calendar year (CY) ratios are by definition, not developed.
Source data from carrier Annual Statements.
Accident year (AY) ratios are developed to ultimate.
Source data is based on combination of NCCI financial call data and Annual Statement data.
Sources:
* Calendar Yr Results - Net Basis; NCCI AIS 2009 State of Line, p. 20
** IEE and Statutory Page 14 - Direct Basis
*** Calendar-Accident Year Underwriting Results - NCCI website as of 01/15/09

Combined Ratios
Calendar-Accident Year 2006

Source:
NCCI Financial Call data used in Calendar-Accident Year Underwriting Results, evaluated as of 12/31/07; 36 states; NCCI website as of 1/15/09