Combined ratio less the investment-income ratio, measuring overall pre-tax profitability including investment return.
The operating ratio corrects the combined ratio's blind spot by incorporating investment income generated by the float (premiums collected before claims payment, invested reserves). Formula: operating ratio = combined ratio − (investment income / earned premiums). Below 100%: the overall operation is profitable even if underwriting alone is loss-making. Particularly relevant in long-tail lines (liability, construction) where the float is significant. It excludes capital gains and taxes: it is not the accounting net result.
Combined ratio 103% − investment yield 8% = operating ratio 95%: overall profitable operation.
ratio opérationnel, combined ratio net de financiers