Insurers' variable Claims Costs determine whether they succeed or fail: Are they profitable? Are they incurring operating losses? Are they solvent? What level of benefits can they provide? What are the highest level of Claims Costs they can pay and survive? Insurers earn profits if their PLREs and Operating Expense ratios sum to less than 100% (i.e. Claims Costs + Operating Expenses Earned Premiums) or they incur Operating Losses. If Claims Costs and Operating Expenses greatly exceed Earned Premiums insurers may be insolvent, unable to pay their obligations.