Definition of combined operating ratioCombined operating ratio A measure of general insurance underwriting profitability, the COR compares claims, costs and expenses to premiums. If the costs are higher than the premiums (ie the ratio is more than 100%) then the underwriting is unprofitable. The company may still be profitable if investment income covers the shortfall. If the costs are lower than the premiums then the underwriting is profitable without having to rely on investment income. It is called the Combined Ratio because it combines the loss ratio (claims as a % of premiums) and expense ratio (expenses as a % of premiums).
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