What is the definition of Complaint Ratio?

The complaint ratio is a measure that is used to keep track of customer complaints made against insurance companies. This ratio is commonly used by the state insurance commission or by some state insurance departments to know the extent and number of such customer complaints.

The Complaint Ratio gives the number of customer complaints versus the amount of premiums written. For example, a complaint ratio of 4.50 means that the company has incurred 4.5 complaints for every $1 million worth of total business.

There are also states which include complaints made by medical providers regarding an insurance company's promptness in payment for services rendered.

The Complaint Ratio is one of the measures that indicate to state insurance departments that an insurance company may be up for review and may need closer regulation.

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