A form of total loss, defined by the Marine Insurance Act 1906. Actual total loss is deemed to occur in one of three ways: where the insured item is totally destroyed where it is so damaged that it can no longer be classed as the type of object originally insured where the insured is irretrievably deprived of the insured item
The greater tendency of people with a more than average likelihood of loss to apply for or continue insurance, when compared with other people. An increase in antiselection often occurs in connection with increased lapse rates, which lead to increased mortality or morbidity rates. Also known as: Anti-Selection
This phrase relates to the practice in some PMI markets of calculating premiums using the policyholder's age at policy entry as the basis of risk. The insurer usually retains the right to increase premiums subsequently to allow for medical inflation or medical inflation in excess of levels assumed in the original calculation.
Reinsurance where the reinsurance deductible applies to a group of contracts (as opposed to a single contract), for example, a reinsurance contract that pays out when the loss for an entire line of business exceeds 120% of the expected loss.
All risks is a type of property-casualty insurance coverage that automatically covers any risk (beside explicit exclusion). For example, if an all-risks homeowner's policy does not expressly exclude flood coverage, then the house will be covered for flood.
Allocated loss adjustment expenses (ALAE) are attributed to the processing of a specific insurance claim. ALAE are part of an insurer's expense reserves. It is one of the largest expenses for which an insurer has to set aside funds (along with contingent commissions). Loss adjustment expenses that are assignable or allocable to specific claims. Fees paid to outside attorneys, experts, and investigators used to defend claims are examples of ALAE.
General term for smoothing numerical information using a set of data points to arrive at a single value (measure of central tendency) to represent those data points. Examples include straight averages (a sum of numerical data values divided by the number of data value=arithmetic mean) and weighted averages (putting more or less emphasis on certain data values using a subjective measure of each value's importance). Specific insurance definitions: In non-marine insurance, the term relates to the practice of scaling down the amount of a claim by applying the ratio of the actual sum insured to the