Expected Loss Ratio Calculator

Calculate Expected Loss Ratio (ELR)



Formula

The formula to calculate the Expected Loss Ratio (ELR) is:

\[ ELR = \frac{PC}{EP} \times 100 \]

Where:

Definition

Example

Let's say the projected claims (PC) are \$50,000 and the earned premiums (EP) are \$100,000. Using the formula:

\[ ELR = \frac{50,000}{100,000} \times 100 = 50\% \]

So, the expected loss ratio (ELR) is 50%.

Extended information about "Expected-Loss-Ratio-Calculator"

How to Calculate Expected Loss

Definition: Expected loss is the anticipated amount of loss from a financial transaction or investment.

Formula: \( \text{Expected Loss} = \text{Probability of Default} \times \text{Exposure at Default} \times \text{Loss Given Default} \)

Example: \( \text{Expected Loss} = 0.05 \times 1000000 \times 0.4 \)

How to Calculate Loss Ratio

Definition: The loss ratio is the ratio of losses to premiums earned.

Formula: \( \text{Loss Ratio} = \frac{\text{Incurred Losses}}{\text{Earned Premiums}} \)

Example: \( \text{Loss Ratio} = \frac{500000}{2000000} \)

Calculating a Loss Ratio

Definition: Calculating a loss ratio involves determining the ratio of incurred losses to earned premiums.

Formula: \( \text{Loss Ratio} = \frac{\text{Incurred Losses}}{\text{Earned Premiums}} \)

Example: \( \text{Loss Ratio} = \frac{300000}{1500000} \)

Calculate the Total Expected Loss

Definition: The total expected loss is the anticipated amount of loss from a financial transaction or investment.

Formula: \( \text{Expected Loss} = \text{Probability of Default} \times \text{Exposure at Default} \times \text{Loss Given Default} \)

Example: \( \text{Expected Loss} = 0.03 \times 500000 \times 0.5 \)

Formula for Expected Loss

Definition: The formula for expected loss calculates the anticipated amount of loss from a financial transaction or investment.

Formula: \( \text{Expected Loss} = \text{Probability of Default} \times \text{Exposure at Default} \times \text{Loss Given Default} \)

Example: \( \text{Expected Loss} = 0.04 \times 800000 \times 0.6 \)

Calculate Loss Ratio Formula

Definition: The loss ratio formula calculates the ratio of incurred losses to earned premiums.

Formula: \( \text{Loss Ratio} = \frac{\text{Incurred Losses}}{\text{Earned Premiums}} \)

Example: \( \text{Loss Ratio} = \frac{400000}{1000000} \)

How to Compute Loss Ratio

Definition: Computing the loss ratio involves determining the ratio of incurred losses to earned premiums.

Formula: \( \text{Loss Ratio} = \frac{\text{Incurred Losses}}{\text{Earned Premiums}} \)

Example: \( \text{Loss Ratio} = \frac{600000}{2500000} \)