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Loss Pick

Loss Pick

Definition

Otherwise known as "expected losses," an underwriter's (or actuary's) estimation of future losses based on past losses. Typically, 5 years of historical loss data will be used to predict an estimate of a future year's losses. Loss picks are used to quantify an estimate of the loss component of a typical loss sensitive rating plan such as a retrospective program. The premium is composed of expenses and the loss pick.

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