The ratio of the claims paid by an insurer to the premiums earned, usually for a one-year period.
- The net premium will be adjusted to ensure that cumulative paid loss ratio does not exceed 80% per annual period subject to a maximum net premium of £550 per certificate issued for the relevant annual period.
- The industry's paid loss ratio is now 34 percent, a 15-year low and well below the break-even rate of 58 percent.
- The increase in the cost of the premium was not related to the loss ratio or the dollar amount of the claims against the policy.
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Syllabification: loss ra·tio
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