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Comprehensive cost ratio

The core data used by insurance companies to account for operating costs, including company operations, claims and other expenses. A 100% cost ratio means that revenues and expenses are equal, and there is no underwriting profit or loss. The comprehensive cost ratio, which includes both the claims rate and the expense ratio, is the main measure of the profitability of the general insurance industry, and the lower the comprehensive cost ratio is, the more profitable the general insurance company is.

Simply put, you can understand that the comprehensive cost includes

1, operating costs (including policy costs/manpower costs and other comprehensive necessary expenses)

2, commissions

3, actual and projected expenses for claims

If the sum of the above items is equal to the full premiums, then the comprehensive cost ratio is 100% and the company has not made any money.

The so-called combined payout ratio, that is because the operating costs and commissions are fixed, the combined cost ratio of the high and low depends on the high and low payout ratio. I'm not sure I understand.