working layer

A working layer is a dollar range in which an insured or, in the case of an insurer's book of business, a group of insureds is expected to experience a fairly high level of loss frequency.

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This is the layer typically subject to deductibles, self-insured retentions (SIRs), retrospective rating plans, and similar programs. Sufficient loss frequency in the working layer allows many organizations to provide some degree of statistical credibility to actuarial forecasts of the total expected losses during a specific period of time—for example, 1 year.