The expected loss ratio method uses an assumed relationship between claims and premium to estimate claims costs under an actuarial approach.
The distinction that matters
The result depends on assumptions and data and is not a final claim payment forecast for an individual insured.
What to check
- Check the premium basis.
- Review selected assumptions.
- Compare emerging experience.
Example to discuss
An actuary revisits an assumption when portfolio mix changes rather than treating the old ratio as fixed.
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.