Pure Loss Rate

Tutorial

The purpose of the Pure Loss Rate page is to estimate losses for the projected period. This procedure utilizes past experience and user judgment to determine a factor which, when applied to exposures, produces an estimate of ultimate incurred losses.

The pure loss rate can be defined as the expected dollar loss cost per unit of exposure. In the case of sales and payroll, the adjusted exposure is used.

You should evaluate the various average pure loss rates shown near the bottom of the screen in order to select and enter the selected projected pure loss rate. You can also choose to adjust the user defined weights on each policy period in order to give more or less consideration to any desired periods and thus affect the user weighted average pure loss rate.

You must also enter the projected exposure in order for the system to apply the selected pure loss rate and arrive at total projected losses for the analysis.

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Pure Loss Rate

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