What Is the Combined Ratio?

A deeper look at the combined ratio.

One of the most important metrics to watch at insurances companies, like Markel (MKL 0.99%), Berkshire Hathaway (BRK.A 1.01%) (BRK.B 0.93%), and Montpelier Re (MRH.DL), is the combined ratio. But what exactly is the combined ratio and why is it important?

In this segment of The Motley Fool's financials-focused show, Where the Money Is, banking analysts Matt Koppenheffer and David Hanson discuss the metric and its meaning.

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David Hanson owns shares of Markel. Matt Koppenheffer owns shares of Berkshire Hathaway and Markel. The Motley Fool recommends Berkshire Hathaway, Markel, and Montpelier Re Holdings. The Motley Fool owns shares of Berkshire Hathaway and Markel. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.