[[Actuarial Notes Wiki|Wiki]] / [[Exam 5 (CAS)]] / **Occurrence Coverage** ## Definition ==Occurrence Coverage== Occurrence coverage is an insurance policy form that covers claims for losses that occur during the policy period, regardless of when the claim is reported. ## Key Features ### Coverage Trigger Loss must **occur** during the policy period: - Accident date within policy term - Reporting date irrelevant - Claims can be reported years later - Coverage follows occurrence date ### Example ``` Policy Period: 1/1/2024 - 12/31/2024 Loss occurs: 6/15/2024 Claim reported: 3/1/2026 Result: COVERED (occurred during policy period) ``` ## Comparison to Claims-Made | Feature | Occurrence | Claims-Made | |---------|------------|-------------| | Trigger | Loss occurs | Claim reported | | Tail coverage | Automatic | Need extended reporting | | Pricing | Higher premium | Lower initial premium | | Development | Longer tail | Shorter development | ## Ratemaking Implications ### Data Organization **Accident year** is natural choice: - Matches coverage trigger - Aligns premium with losses - Standard industry practice ### Reserve Development - Longer development period - Significant IBNR - Reporting delays ## Common Lines - General liability - Auto liability - Workers compensation - Property (most) ## Related Concepts - [[Claims-Made Coverage]] - [[Accident Year]] - [[IBNR Reserves]] ## References - Werner & Modlin, Chapter 3 - Friedland, Chapter 2