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Trend Analysis

Trend Analysis

Definition

A technique used by risk managers for forecasting future events, such as accidental and business losses. This process involves a review of historical loss data to ascertain patterns of change in loss frequency or loss severity; the results can be used to adjust projections previously established by probability analysis to produce forecasts that are more accurate. This analysis is appropriate for forecasting losses when the analyst assumes that past or future changes in the organization's operations, in technology, or in underlying economic or social factors are likely to change or modify a projection of losses based solely on probability analysis.

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