Expense ratio

Operating and commission expenses as a percentage of premiums. An insurer spending ₹900 crore on ₹3,000 crore of premium runs at 30%.

Distribution costs dominate. An insurer selling through its own digital channel operates at a structurally lower ratio than one paying bank or agency commissions, and the difference compounds into the combined ratio year after year.

Scale helps, since much of the expense base is fixed, which is why the ratio improves as a young insurer grows and why the growth is worth funding.