What is the definition of Expense Ratio?

Expense Ratios refer to the portion of the premium that is used to pay for costs such as overhead, commissions, as well as writing and servicing insurance and reinsurance policies. The Expense ratio is expressed as a percentage.

The expense ratio is used as one of the important indicators of the insurance company's performance, as well as an intrinsic part of the computations of the policy's premiums.

The expense ratio also refers to the percentage of the total investment people invest in a mutual fund in a year, as against fees like operating fees, administrative and management fees. For prospective investors, it is good to compare the expense ratio to the prospective return or increase in value. It the rate of return less the expense ratio is at a positive, which means that the fund will post a gain for that year.

• Reinstatement
• Registered Principal
• Liquor Liability
• Businessowners Policy (BOP)
• Directors and Officers Liability Insurance