Premium-to-Surplus Ratio
Definition
- A metric commonly used in the insurance industry to measure an insurer's financial strength. The Premium-to-surplus ratio gives insight into how dependent an insurer is on credit, with a lower ratio generally indicating better financial strength. To find an insurer's premium-to-surplus ratio, one divides net premiums written by surplus.
Synonyms
insurance premiums to surplus
Related Terms and Acronyms
- Developed to Net Premiums Earned — Definition,
- A method used to determine if the premiums charged by an insurer are in balance with the benefits they pay out.
- Expense Ratio — Definition,
- A method of calculating an insurer's operating efficiency.
- Loss Ratio — Definition,
- A method of comparing an insurer's losses to premiums earned in a specific period of time.
- Medical Loss Ratio — Definition,
- A method of comparing the medical costs paid to the premiums earned by an insurance company in a specific period of time.
- Policy Illustration — Definition,
- An outline of how a policy will perform under various conditions over a period of time.
- Policyholder Dividend Ratio — Definition,
- A ratio comparing the dividends paid to policyholders to net premiums earned by the insurer.
- Policyholder Surplus — Definition,
- A method of determining an insurance company's relative financial strength by finding the difference between the company's assets and liabilities.
- Premium — Definition,
- A payment made to an insurance company for insurance coverage.
- Premium Balances — Definition,
- A ledger kept by insurance companies recording insurance premiums.
- Premiums Written — Definition,
- A sum of the premiums from all the policies that a company has written in a given period of time.
- Reinsurance Recoverables to Policyholder Surplus — Definition,
- A method used to determine how much an insurer relies on reinsurance.
