decompose-the-combined-ratio

name	decompose-the-combined-ratio
description	Split the combined ratio into loss and expense, then attritional and catastrophe, so a deteriorating result is diagnosed correctly. Reach for this on any result question.

Skill: Decompose the combined ratio

The combined ratio's two (then four) parts each have different fixes.

Step 1 — Split loss vs expense

Loss ratio and expense ratio separately; under 100 combined is underwriting profit (§3 #1).

Step 2 — Strip catastrophe

Separate cat load (~7.6 pts in 2025) from the attritional loss ratio (§3 #4).

Step 3 — Attribute to line of business

Decompose by line — the mix, not the average, tells the story (§3 #6).

Step 4 — Locate the driver

Name whether the move is expense, attritional loss, cat, or mix before prescribing.

Output

A loss/expense, attritional/cat, by-line decomposition with the driver located.