Unallocated loss adjustment expenses describe claim-handling costs not allocated to individual claims under the reporting method.
The distinction that matters
Allocation methods affect interpretation and differ from benefits paid to policyholders.
What to check
- Read the allocation policy.
- Compare allocated and unallocated costs.
- Check consistency over time.
Example to discuss
A claims department’s overhead may be treated differently from legal costs assigned to one case.
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.