Dec 27, 2024
5:11:51pm
5:11:51pm
Of course not, because of the investments. I’m not talking about profitability. I’ll talking about combined ratio which
is an important metric for insurance companies.
Premiums/(loss payments+overhead) is how you determine the combined ratio. Profits would include interest income so in many instances the actual business of writing insurance is a small loss but due to the investments the company will be profitable.
A couple of years ago State Farm had a combined ratio of like 120% (expenditures on claims+overhead outpaced collected premiums) and I believe they still we profitable due to the high interest rates and investment returns.
Premiums/(loss payments+overhead) is how you determine the combined ratio. Profits would include interest income so in many instances the actual business of writing insurance is a small loss but due to the investments the company will be profitable.
A couple of years ago State Farm had a combined ratio of like 120% (expenditures on claims+overhead outpaced collected premiums) and I believe they still we profitable due to the high interest rates and investment returns.
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Time
Dec 27, 12:58pm
Dec 27, 12:16pm
That’s very simplistic thinking. The profit for an insurance company isn’t just 100 less the combined ratio. Insurance
Dec 27, 12:51pm
Dec 27, 1:34pm
Dec 27, 1:44pm
Investing the money they receive in premium before it is paid out in claims. Carriers are huge investment engines.
Dec 27, 2:05pm
Dec 27, 4:25pm
Of course not, because of the investments. I’m not talking about profitability. I’ll talking about combined ratio which
Dec 27, 5:11pm
Dec 27, 5:13pm
Dec 27, 5:21pm