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Foundations of Casualty Actuarial Science

Total claims payments at final settlement of all claims; prior to
final settlement, estimates of ultimate losses include reported
losses and IBNR reserves.

Ultimate Net Loss
The total sum which the insurance company becomes
obligated to pay either through adjudication or compromise,
for litigation, settlement, adjustment and investigation of
claims and suits which are paid as a consequence of the
insured loss, excluding only the salaries of the company’s
permanent employees.

Unallocated Loss Adjustment Expenses
An insurer’s overhead expenses and other costs of doing business
such as payments to salaried employees ; costs that cannot be
specifically designated to a particular claim.

Underwriting Expenses
All expenses incurred in the underwriting of a piece of business;
does not include losses, loss adjustment expenses, investment
expenses, policyholder dividends, or income taxes.

Underwriting Profit 279

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