Insurance
Solvency Ratio
Also known as: Financial Strength Ratio, Capital Adequacy Ratio
Financial metric indicating insurance company's ability to meet long-term obligations and pay claims.
Detailed Explanation
Solvency ratio measures an insurance company's financial strength and ability to pay claims by comparing available assets to liabilities. IRDAI mandates minimum 1.50 ratio, but ratios above 1.75 indicate stronger financial health. Higher solvency ratios suggest better security for policyholders.