What is Expense Ratio?
Expense Ratio A financial metric expressing an insurer’s operating expenses as a percentage of net premiums earned, used to assess efficiency.
Source: CFA Institute, IFRS Foundation, FASB (GAAP), Basel III Framework
How is “Expense Ratio” Used in Practice?
A low expense ratio indicates that the insurer is managing its administrative costs efficiently relative to premium income.
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Who Needs to Know This Term?
- Financial Analysts
- Bankers
- Traders
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What is Expense Ratio?
A financial metric expressing an insurer’s operating expenses as a percentage of net premiums earned, used to assess efficiency.
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