Allocated loss adjustment expenses are claim-handling costs assigned to individual claims under the reporting method.
The distinction that matters
They differ from unallocated overhead and from the benefit paid for the insured loss.
What to check
- Read expense definitions.
- Check allocation consistency.
- Review gross and net treatment.
Example to discuss
Legal costs assigned to a particular claim may be reported separately from general claims administration.
This is a hypothetical comparison, not a customer claim or a determination of cover.
Jurisdiction and scope
Use the definition in the report being analysed. Changes in business mix, reinsurance, estimation and reporting methods can affect interpretation. These measures do not determine whether an individual claim is covered.
Sources and further reading
General information only. The policy, schedule and applicable rules determine the actual position. For a personal decision, use an appropriately qualified adviser or the relevant provider.