A measure of an organisation’s suitability for insurance coverage. Insurance underwriters use simple loss ratios (losses divided by premiums) as one of the tools with which to gauge a company’s suitability for coverage. In many cases, a high loss ratio—meaning one where the losses approach, equal, or exceed the premium—is considered bad.

BPIR Categories

15.6.11 Financial management
11.1.4 Manage cash flow

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