Leverage

{
  "id": "MLC-T-INS-001992",
  "term": "Leverage",
  "field": "Insurance and risk management",
  "definition": "The extent to which an insurer relies on policyholder surplus and borrowed funds to conduct its operations and support its assumption of risk. Underwriting leverage is measured by the ratio of net written premiums to surplus, while financial leverage is measured by the ratio of debt to equity. High leverage can amplify profits during favorable periods but also increases the risk of insolvency during periods of high claims or investment losses.",
  "url": "https://mlchart.com/terminology/insurance/leverage/"
}