@d36528r79
Sustainable insurance models target loss ratios of 50-70%, meaning $0.50-$0.70 paid in claims for every $1.00 collected in premiums. Current market ratios range from 40-60% as protocols build capital reserves. The remaining 30-50% covers operational costs, capital costs, and profit margins. Ratios above 80% indicate underpricing, while below 40% suggests excessive conservatism that may drive operators to self-insure.
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