--- title: "✅ What is loss ratio? | Reinsurance tutorials #30" description: Understand what is loss ratio - easily explained with a video. 📌These tutorials will offer you all the basics you need to master reinsurance image: https://blog.arundore.com/hubfs/loss%20ratio%20LN.jpg --- [![Arundo_Logo_RVB-1](https://blog.arundore.com/hs-fs/hubfs/Arundo_Logo_RVB-1.png?width=115&height=76&name=Arundo_Logo_RVB-1.png)](https://www.ccr-re.com/en/home) - [News](https://blog.arundore.com/en) - [Reinsurance Tutorials](https://info.arundore.com/reinsurance-tutorials) - [Women of Power](https://info.arundore.com/women-of-power) - [MTPL Losses France Study](https://info.arundore.com/assessing-the-losses-of-severe-personal-injury-victims-in-motor-liability-cases) - [Arundo Re Talks](https://www.arundore.com/en/arundo-re-talks) - [français-FRANCE](https://blog.arundore.com/fr/qu-est-ce-que-le-rapport-sinistres-a-primes) [Home](https://blog.arundore.com/) [The reinsurance and insurance blog of Arundo Re](https://blog.arundore.com/en) What is loss ratio? 12 April 2021 1 min read # What is loss ratio? ## Reinsurance tutorials #30 ## What is loss ratio? The loss ratio is used by insurance and reinsurance companies. It is calculated as follows: cost of claims divided by premiums.  It can be taken individually or globally – i.e. for each insured – or to determine the profitability of the activity.   The Loss ratios vary depending on the type of insurance. For example, the loss ratio for Health insurance tends to be higher than the loss ratio for Property and Casualty insurance.   Loss ratios help assess the health and profitability of an insurance company. A business collects premiums higher than amounts paid in claims – therefore, high loss ratios may indicate that a business is in [financial distress](https://www.investopedia.com/terms/f/financial_distress.asp).     ---     ## 📺 More episodes to come... 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