How important should these be when you’re choosing your locum insurance?
How can you tell if the company you’re proposing to use is a good bet?
Loss ratios
In simple terms, this is ‘money in vs money out’: how much does the underwriter receive in premiums (and pay in operating expenses) compared with what has been paid out in claims. It’s one measure – a very important one – of the profitability of the business. It should be reviewed dynamically to keep tabs on what constitutes good business. ‘Good business’ doesn’t mean policies never paying out claims; it means charging the right premium rates so that all genuine claims are paid swiftly and with no quibbling.
An individual client could be forgiven for thinking ‘as long as my claim is paid I don’t give a hoot’.
Well that’s the rub.
