What is Loss ratio (in insurance)?

The ratio of an insurer's losses for a period (insurance payouts and the liabilities for them) to the insurance premiums earned in that period, in percent. It shows what part of the premium collected goes to covering losses. In some calculations the costs of handling claims are also added to the numerator, so before comparing the indicator you need to know how it was calculated. If the ratio is very high, the rate may be insufficient for the risk; if it is very low, insurance may be expensive for the customer.

Source: Loss Ratio, USLegal