Loss ratios reveal how much of every premium dollar flows back to policyholders as claims. When ratios sit well below 70% year after year, insurers may be collecting more than the underlying risk warrants — and consumers can end up paying the price.
Claims paid ÷ premiums earned. A 75% ratio means 75¢ of every premium dollar goes to claims. The remainder covers insurer expenses, profit, and reserves.
A 70–80% loss ratio is generally considered fair. States consistently below 70% may be overcharging policyholders relative to actual risk — particularly when that pattern persists across a decade.
Researchers at the Vanderbilt Policy Accelerator have analyzed these loss ratios and proposed federal and state reforms to address overpriced insurance. Their papers explain what fair loss ratios look like and how regulation can bring premiums in line with actual risk. Read the research →
Insurers file separate rates in each state. Where regulation is weak or markets are concentrated, low loss ratios can persist for years. Sustained underperformance suggests premiums are not calibrated to risk and that regulatory intervention may be warranted.
Explore the data
All loss ratios are sourced directly from the NAIC Market Share Reports for Property/Casualty Groups and Companies by State and Countrywide, published annually. Data covers report years 2000 through 2024 (25 years). Reports from 1995–1999 are scanned image PDFs with no machine-readable text and could not be parsed. The 2008 report uses a slightly different column format (**TOTAL** rather than **STATE TOTAL**) which was parsed accordingly. For years 2000–2007, state totals are the aggregate direct loss ratio from the **TOTAL** row in each state's section.
Lines covered: Homeowners Multiple Peril (Line 04), Total Private Passenger Auto (Lines 19.1/19.2/21.1), Workers' Compensation (Line 16), Total Commercial Multiple Peril (Line 05), and Other Liability (Lines 17.1/17.2). Where a state reported N/A in a given year (typically monopoly state funds with no private market activity), that year is excluded from that state's average. States with fewer than 3 valid years for a given line are shown as N/A.
The black "National Average" reference shown on every chart, map, and trend line is the countrywide industry-wide direct loss ratio for that line of business — sourced from the "Direct Loss Ratios by Line of Business — States, U.S. Territories, Canada and Aggregate Other Alien" summary table that appears in the first several pages of each Market Share Report. This nationwide figure is a single countrywide aggregate, distinct from the state-level "STATE TOTAL" rows used elsewhere in this analysis, and is intended to let any state's result be compared against the industry as a whole.
The 70–80% range used here as a reference reflects loss ratios at which premiums broadly track claims once typical expenses and reserves are covered. It is a policy benchmark rather than a single actuarial constant, and the level that is appropriate varies by line of business. Vanderbilt Policy Accelerator research goes further, proposing a minimum loss-ratio floor of 80%. States consistently below this range across multiple lines and years may warrant regulatory attention. For analysis of what fair loss ratios require and proposals for federal and state policy reform, see the Vanderbilt Policy Accelerator insurance research.
Data source: National Association of Insurance Commissioners (NAIC).