[[Actuarial Notes Wiki|Wiki]] / [[Exam 5 (CAS)]] / **High Frequency Insurance** ## Definition ==High Frequency Insurance== refers to lines of business characterized by many claims per exposure unit, though individual claim sizes are typically smaller. ## Characteristics - Many claims occur - Lower average severity - More predictable in aggregate - Statistical credibility achieved with fewer exposures ## Typical Lines - Auto physical damage - Personal auto liability - Homeowners property - Workers compensation (some classes) ## Implications ### Ratemaking - Frequency trends important - Large claim treatment less critical - More stable loss ratios - Credibility achieved faster ### Reserving - Case reserves more reliable (many claims) - IBNR estimation more stable - Development patterns smoother ## Related Concepts - [[Low Frequency Insurance#Definition]] - [[Frequency Analysis#Definition]] - [[Severity Analysis#Definition]] ## References - Friedland, Chapter 1