Definition
The expense ratio measures an insurer’s operational efficiency by comparing its total operating expenses (including acquisition costs and administrative expenses) to its earned premiums. It indicates cost management effectiveness.
Why it matters (in Poovi’s context)
This ratio is a critical component of the combined ratio and directly influences underwriting profitability. Managing the expense ratio efficiently is key to competitive advantage and financial health.
Key properties or components
- Rose to 35.6% in 2025 (from 34.4% in 2024).
- Factors include profitability-driven commissions, mix-driven acquisition costs, and foreign exchange impacts.
Contradictions or debates
None.