Discover Loss Ratio/ Lr
Loss Ratio/ Lr Technical Terms
Loss Ratio/ Lr : A measurement that an insurance company uses to determine the profitability of an Association. The LR is typically the sum of the actual amounts paid out due to losses plus any existing reserves, divided by the premiums collected for that time period. This "pure loss ratio" does not take into account any carrier adjustment expenses or defense costs. A loss ratio may include Loss Adjustment expenses. However, the "Combined Loss Ratio" also adds in the company’s operating expenses. More reliable loss ratios cover at least 3 years.