BEHIND THE NUMBERS
How this calculation works
Rate on line (%) = layer premium ÷ layer limit × 100. Target premium = limit × rate ÷ 100. Signed premium and limit multiply the 100% figures by written share. Exhaustion point = attachment + limit. Premium-only payback = limit ÷ premium.
Worked example
£200,000 is 4% of the £5m layer. A 25% written share is £50,000 premium and £1.25m limit. The layer exhausts at £6m.
Example result: 4%
Use the layer limit
Dividing by total insured value or by attachment plus limit produces a different ratio. Check the contract wording before choosing the two inputs.
A ratio is not a risk assessment
Two layers can have the same rate on line but very different loss probabilities. The payback ratio ignores claims, expenses and timing.
Assumptions and rounding
- Premium and limit use matching currencies, terms and coverage bases.
- The written share changes monetary exposure, not the rate on line.
Questions about this calculator
Is attachment included in the denominator?
No. The denominator is the coverage limit of the layer.
Can I compare net and gross premiums?
Only after making the basis consistent. This tool does not infer brokerage or tax adjustments.