Which term best describes the efficiency of an insurer in handling claims?

The term that best describes the efficiency of an insurer in handling claims is the loss ratio. The loss ratio is a key financial metric used in the insurance industry, calculated by dividing the total claims paid by the premiums earned. It provides insight into how well an insurer is managing its underwriting practices and how efficiently it is processing and settling claims relative to the income generated from premiums.

A lower loss ratio indicates that the insurer is keeping more of the premium dollars as profit after paying out claims, suggesting effective claims management and operational efficiency. Conversely, a higher loss ratio can signify challenges in claims processing or excessive claims payouts compared to premium income. This metric is crucial for assessing an insurer's performance and financial stability in the claims-handling aspect of their operations.