Loss Ratio is term used often in the business insurance world.
The first question we have to ask is, “What is Loss Ratio?” According to Wikipedia:
The loss ratio is the ratio of total losses incurred (paid and reserved) in claims plus adjustment expenses divided by the total premiums earned.
For most small businesses, loss ratio has the most obvious effect on workers compensation insurance premiums. However, over time a business loss ratio for liability and property insurance claims can impact premiums as well.
The higher your loss ratio is the higher your insurance premiums are going to be. Understanding concepts such as these will help you lower business insurance premiums for your organization.
Watch this video “How does my loss ratio affect business insurance premiums?” for more details:
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created by Ryan Hanley