WordNet
n. the ratio of the annual claims paid by an insurance company to the premiums received
Wikipedia
A loss ratio is a ratio of losses to gains, used normally in a financial context. It is the opposite of the gross profit ratio (commonly known as the gross profit margin).
For insurance, the loss ratio is the ratio of total losses incurred (paid and reserved) in claims plus adjustment expenses divided by the total premiums earned. For example, if an insurance company pays $60 in claims for every $100 in collected premiums, then its loss ratio is 60% with a profit ratio/gross margin of 40% or $40. Some portion of those 40 dollars must pay all operating costs (things such as overhead and payroll), and what is left is the net profit.
Loss ratios for property and casualty insurance (e.g. motor car insurance), range typically from 40% to 60%. Such companies are collecting premiums more than the amount paid in claims. Conversely, insurers that consistently experience high loss ratios may be in bad financial health. They may not be collecting enough premium to pay claims, expenses, and still make a reasonable profit.
The terms "permissible", "target", "balance point", or "expected" loss ratio are used interchangeably to refer to the loss ratio necessary to fulfill the insurer's profitability goal. This ratio is 1 minus the expense ratio, where the expenses consist of general and administrative expenses, commissions and advertising expenses, profit and contingencies, and various other expenses. Expenses associated with insurance payouts ("losses") are sometimes considered as part of the loss ratio. When calculating a rate change, the insurer will typically divide the incurred or actual experienced loss ratio (AER) by the permissible loss ratio.
For banking, a loss ratio is the total amount of unrecoverable debt when compared to total outstanding debt. For example, if $100 was loaned, but only $90 was repaid, the bank has a loss ratio of 10%. These calculations are applied class-wide and used to determine financing fees for loans. If the average loss ratio on a class of loans is 2%, then the financing fees for loans of that class must be greater than 2% to recover the normal loss and return a profit.
Usage examples of "loss ratio".
It had to be considered an acceptable loss ratio, given how few gunboats of the attack wave had made it back to their planetary bases.
As Commander Ling just pointed out, the loss ratio is overwhelmingly in our favor and seems likely to remain so, yet the enemy continues to throw superdreadnoughts at us, and now he's added this assault fleet component.
Yet despite Haven's horrific losses, the loss ratio was actually in the Republic's favor in hulls, and hugely so in terms of loss of life.
But Venport still found the profit-loss ratio acceptable, since enough ships got through.
In an insurance office, any time the loss ratio exceeds the profit ratio by ten percent, the board begins to scrutinize the entire operation, trying to decide where the trouble lies.
From what Garza tells me, the team's kill-loss ratio was excellent.
But I think Elric also demonstrates that as long as we can balance our numbers against their tech advantage, we can push them back for an acceptable loss ratio.
Unless they somehow managed to inflict an incredibly lopsided loss ratio, it would have to be a fairly short war.