Term
| Loss adjustment expense (LAE) |
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Definition
| The expense that an insurer incurs to investigate, defend, and settle claims according to the terms specified in the insurance policy. |
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Term
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Definition
| Losses that have been paid to, or on behalf of, insureds during a given period. |
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Term
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Definition
| The losses that have occurred during a specific period, no matter when claims resulting from the losses are paid. |
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Term
| Incurred but not reported (IBNR) losses |
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Definition
| Losses that have occurred but have not yet been reported to the insurer. |
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Term
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Definition
| The portion of an organization’s profits that is paid to shareholders. |
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Term
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Definition
| Types of property, both tangible and intangible, owned by an entity. |
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Term
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Definition
| Assets meeting minimum standards of liquidity that an insurer is allowed to report on its balance sheet in accordance with statutory accounting principles. |
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Term
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Definition
| Types of property, such as office furniture and equipment, that regulators do not allow insurers to show as assets on financial statements because these assets cannot readily be converted to cash at or near their market value. |
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Term
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Definition
| Financial obligations, or debts, owed by a company to another entity, usually the policyholder in the case of an insurer. |
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Term
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Definition
| An estimate of the amount of money the insurer expects to pay in the future for losses that have already occurred and been reported, but are not yet settled. |
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Term
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Definition
| An insurer liability representing the amount of premiums received from policyholders that are not yet earned. |
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Term
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Definition
| Under statutory accounting principles (SAP), an insurer’s total admitted assets minus its total liabilities. |
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Term
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Definition
| A ratio that measures losses and loss adjustment expenses against earned premiums and that reflects the percentage of premiums being consumed by losses. |
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Term
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Definition
| An insurer’s incurred underwriting expenses for a given period divided by its written premiums for the same period. |
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Term
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Definition
| A profitability ratio that indicates whether an insurer has made an underwriting loss or gain. |
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Term
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Definition
| Net investment income divided by earned premiums for a given period. |
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