Loss Severity

Potential size of future losses.
***
The amount of a loss in financial terms.
***
The cost of the loss often combined with loss frequency. Some losses occur frequently and are less severe, while some losses occur rarely but are more severe. Fender benders have high frequency and low severity, while 9.0 magnitude earthquakes have low frequency but high severity.

Leave a Reply

Your email address will not be published. Required fields are marked *