Loss Ratio Calculator
ANA›Life Services Authority›National Calculator Authority›Loss Ratio Calculator
.calc-container { max-width: 640px; margin: 2rem 0; padding: 1.5rem; background: #fff; border: 1px solid #ddd; border-radius: 8px; box-shadow: 0 1px 3px rgba(0,0,0,0.06); font-family: system-ui, -apple-system, sans-serif; } .calc-container h3 { font-family: Georgia, serif; font-size: 1.15rem; color: #1a1a1a; margin-bottom: 1rem; padding-bottom: 0.5rem; border-bottom: 2px solid var(--ac, #3d5a80); } .calc-row { display: flex; align-items: center; gap: 0.75rem; margin-bottom: 0.75rem; flex-wrap: wrap; } .calc-row label { min-width: 160px; font-size: 0.9rem; color: #333; font-weight: 500; } .calc-row input[type="number"], .calc-row select { flex: 1; min-width: 120px; max-width: 200px; padding: 0.5rem 0.6rem; border: 1px solid #ccc; border-radius: 4px; font-size: 0.9rem; font-family: system-ui, sans-serif; color: #1a1a1a; background: #fafaf8; } .calc-row input:focus, .calc-row select:focus { outline: none; border-color: var(--ac, #3d5a80); box-shadow: 0 0 0 2px rgba(26,74,138,0.12); } .calc-row .unit { font-size: 0.82rem; color: #888; min-width: 30px; } .calc-btn { display: inline-block; margin-top: 0.5rem; padding: 0.55rem 1.5rem; background: var(--ac, #3d5a80); color: #fff; border: none; border-radius: 4px; font-size: 0.9rem; font-weight: 600; cursor: pointer; font-family: system-ui, sans-serif; } .calc-btn:hover { opacity: 0.9; } .calc-result { margin-top: 1.25rem; padding: 1rem 1.25rem; background: #f0f6fc; border-left: 3px solid var(--ac, #3d5a80); border-radius: 0 6px 6px 0; display: none; } .calc-result.visible { display: block; } .calc-result-label { font-size: 0.78rem; text-transform: uppercase; letter-spacing: 0.06em; color: #666; margin-bottom: 0.25rem; } .calc-result-value { font-size: 1.6rem; font-weight: 700; color: var(--ac, #3d5a80); } .calc-result-detail { font-size: 0.85rem; color: #555; margin-top: 0.5rem; line-height: 1.5; } .calc-note { margin-top: 1rem; font-size: 0.8rem; color: #888; font-style: italic; } .calc-grid { display: grid; grid-template-columns: 1fr 1fr; gap: 0.75rem; margin-top: 0.75rem; } .calc-grid-item { padding: 0.6rem 0.8rem; background: #f8f9fa; border-radius: 4px; border: 1px solid #eee; } .calc-grid-item .label { font-size: 0.75rem; color: #888; text-transform: uppercase; letter-spacing: 0.04em; } .calc-grid-item .value { font-size: 1.1rem; font-weight: 600; color: #1a1a1a; } @media (max-width: 720px) { .calc-row { flex-direction: column; align-items: flex-start; gap: 0.3rem; } .calc-row label { min-width: auto; } .calc-row input[type="number"], .calc-row select { max-width: 100%; width: 100%; } .calc-grid { grid-template-columns: 1fr; } } .calc-chart { margin: 1rem 0; text-align: center; } .calc-chart svg { max-width: 100%; height: auto; } .calc-chart-legend { display: flex; flex-wrap: wrap; justify-content: center; gap: 0.6rem 1.2rem; margin-top: 0.6rem; font-size: 0.8rem; color: #555; } .calc-chart-legend span { display: inline-flex; align-items: center; gap: 0.3rem; } .calc-chart-legend i { display: inline-block; width: 10px; height: 10px; border-radius: 2px; font-style: normal; } .calc-related { max-width: 640px; margin: 2rem 0 1rem; padding: 1.25rem 1.5rem; background: #f8f9fa; border: 1px solid #e8e8e8; border-radius: 8px; } .calc-related h3 { font-family: Georgia, serif; font-size: 1rem; color: #1a1a1a; margin: 0 0 0.75rem; padding-bottom: 0.4rem; border-bottom: 2px solid var(--ac, #3d5a80); } .calc-related-list { list-style: none; padding: 0; margin: 0 0 0.75rem; display: grid; grid-template-columns: 1fr 1fr; gap: 0.4rem 1.5rem; } .calc-related-list li a { font-size: 0.88rem; color: var(--ac, #3d5a80); text-decoration: none; } .calc-related-list li a:hover { text-decoration: underline; } .calc-browse-all { margin: 0.5rem 0 0; font-size: 0.9rem; font-weight: 600; } .calc-browse-all a { color: var(--ac, #3d5a80); text-decoration: none; } .calc-browse-all a:hover { text-decoration: underline; } @media (max-width: 720px) { .calc-related-list { grid-template-columns: 1fr; } }
Loss Ratio Calculator
Calculate the loss ratio — the percentage of premiums used to pay claims and adjustment expenses — to evaluate insurance underwriting profitability.
Incurred Losses ($)
Total claims paid plus reserves for outstanding claims during the period.
Loss Adjustment Expenses / LAE ($) (optional)
Costs to investigate and settle claims (allocated + unallocated). Leave blank to calculate pure loss ratio.
Earned Premiums ($)
Portion of written premiums corresponding to the expired part of the policy period.
Ratio Type
Pure Loss Ratio (Losses ÷ Premiums) Loss & LAE Ratio ((Losses + LAE) ÷ Premiums)
Calculate
Loss Ratio: —
function losCalc() { const errEl = document.getElementById('los-error'); const resEl = document.getElementById('los-result'); errEl.style.display = 'none'; resEl.style.display = 'none';
const losses = parseFloat(document.getElementById('los-incurred-losses').value); const lae = parseFloat(document.getElementById('los-lae').value) || 0; const premiums= parseFloat(document.getElementById('los-earned-premiums').value); const type = document.getElementById('los-type').value;
// --- Validation --- const errors = []; if (isNaN(losses) || losses 0 && losses > premiums * 10) errors.push('Warning: Incurred Losses appear unusually high relative to Earned Premiums. Please verify inputs.');
if (errors.length) { errEl.innerHTML = errors.map(e => '' + e + '
').join(''); errEl.style.display = 'block'; return; }
// --- Core Formulas --- // Pure Loss Ratio = Incurred Losses / Earned Premiums const pureLossRatio = losses / premiums;
// Loss & LAE Ratio = (Incurred Losses + LAE) / Earned Premiums const laeLossRatio = (losses + lae) / premiums;
const displayRatio = (type === 'combined-lae') ? laeLossRatio : pureLossRatio; const displayLabel = (type === 'combined-lae') ? 'Loss & LAE Ratio' : 'Pure Loss Ratio';
// --- Benchmark interpretation --- let benchmark = ''; if (displayRatio '$' + v.toLocaleString('en-US', {minimumFractionDigits:2, maximumFractionDigits:2}); const pct = v => (v * 100).toFixed(2) + '%';
document.getElementById('los-ratio-label').textContent = displayLabel; document.getElementById('los-ratio-value').textContent = pct(displayRatio);
let details = ''; details += 'Incurred Losses' + fmt(losses) + ''; if (type === 'combined-lae') { details += 'Loss Adjustment Expenses (LAE)' + fmt(lae) + ''; details += 'Losses + LAE' + fmt(losses + lae) + ''; } details += 'Earned Premiums' + fmt(premiums) + ''; details += 'Pure Loss Ratio' + pct(pureLossRatio) + ''; if (type === 'combined-lae') { details += 'Loss & LAE Ratio' + pct(laeLossRatio) + ''; } details += '' + benchmark + ''; details += '';
document.getElementById('los-details').innerHTML = details; resEl.style.display = 'block'; }
#### Formulas
Pure Loss Ratio
Loss Ratio = Incurred Losses / Earned Premiums
Loss & LAE Ratio (Combined with Adjustment Expenses)
Loss & LAE Ratio = (Incurred Losses + Loss Adjustment Expenses) / Earned Premiums
Incurred Losses = Losses Paid + Change in Loss Reserves Earned Premiums = Written Premiums − Change in Unearned Premium Reserve
A loss ratio of 60–70% is generally considered the industry benchmark for a profitable line of business, though this varies by line (e.g., workers' comp vs. auto vs. health).
#### Assumptions & References
- The loss ratio alone does not indicate overall profitability; the combined ratio (loss ratio + expense ratio) provides a fuller picture.
- References: NAIC Glossary of Insurance Terms; Insurance Information Institute (III) — How the Insurance Industry Works; CAS Exam Study Notes on Ratemaking (Friedland, 2010).
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