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that were not included in earlier evaluations, accident
year case-incurred losses tend to increase over time. In
order to keep track of the individual. The company
expenses associated with the settlement of claims, as
distinguished from the marketing, investment , or
administrative expenses, are called loss adjustment
expenses.

Those loss adjustments which can be directly related to
a specific claim are called allocated loss adjustment
expenses and those which cannot are called unallocated
loss adjustment expenses.

e) Severity - Severity is the average loss per claim.
Severities can be on a pure loss basis, excluding all loss
adjustment expenses, or they can include allocated or
total loss adjustment expenses.

The loss component can be paid, case-incurred or
projected ultimately and the claims component can be
reported, paid, closed, or projected. This profusion of
available options again requires that the actuary be

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