ratio | Insurance Software development

Who uses profitability ratios and why is it important?

Author - Webner
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6:07 am
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Introduction

In a different blog, we have already discussed the meaning and types of profitability ratios. However, it is imperative to understand the importance of these ratios for an insurance company. Profitability ratios of an insurance company allow the insurance company to measure its profitability against its revenue, cost of sales, equity, and balance sheet assets. Profitability ratios are also related to efficiency ratios as they show how well companies are using their assets to generate profits. In this blog, we will discuss the importance of different profitability ratios and how are they used by investors and creditors […]

What is the Expense Ratio for an Insurance Company?

Author - Webner
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6:33 am
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Introduction to Expense Ratio

Providing financial security to its consumers is the ultimate aim of an insurance company. However, sustaining its own capability to finance its customers becomes its priority. To measure the financial sustainability, insurance companies use various different methods and techniques. Among them, the Expense Ratio serves as the ideal measure providing clarity on the logistics. Signifying the efficiency of an insurance company and measuring its profitability, the expense ratio gives a clearer picture of the financial aspects of the company.

Calculating Expense Ratio

There are generally two ways by which companies calculate the […]

What is a good liquidity ratio for an insurance company?

Author - Webner
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6:47 am
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Introduction

In another blog, we have already discussed the liquidity ratio for an insurance company and how we can measure it. The liquidity ratio of a company shows the ability of a company to turn its assets into cash. This ratio is used to compare the financial performance of insurance companies and also used to determine how profitable a company is from year to year. Investors and creditors use this ratio to observe the potentiality of an insurance company before investing in it. In this blog, we will discuss a little more about the liquidity ratio and what […]

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