Accident-Year Statistics

AAA

DEFINITION of 'Accident-Year Statistics'

A statistic used by insurance companies to gauge what percentage of the premiums received are being paid out in claims. Accident-year statistics are a measure of the total losses against the total revenue (both deductibles and premiums).

INVESTOPEDIA EXPLAINS 'Accident-Year Statistics'

It is a useful tool with regards to setting the premiums for the following year. In watching the trends of the accident-year statistics, insurance companies are able to forecast what their losses are likely to be, and therefore, decide what premiums to charge in order to make a profit.

RELATED TERMS
  1. Premium

    1. The total cost of an option. 2. The difference between the ...
  2. Deductible

    1. The amount you have to pay out-of-pocket for expenses before ...
  3. Insurance

    A contract (policy) in which an individual or entity receives ...
  4. Insurance Claim

    A formal request to an insurance company asking for a payment ...
  5. Lloyd's Of London

    A British insurance market where members join hands as syndicates ...
  6. Reinsurer

    A company that provides financial protection to insurance companies. ...
Related Articles
  1. How An Insurance Company Determines ...
    Home & Auto

    How An Insurance Company Determines ...

  2. Should I pull my money out of an annuity ...
    Home & Auto

    Should I pull my money out of an annuity ...

  3. Why is my insurance premium so high/low?
    Home & Auto

    Why is my insurance premium so high/low?

  4. How the Affordable Care Act Changed ...
    Insurance

    How the Affordable Care Act Changed ...

comments powered by Disqus
Hot Definitions
  1. Ghosting

    An illegal practice whereby two or more market makers collectively attempt to influence and change the price of a stock. ...
  2. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  3. Tangible Common Equity - TCE

    A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. ...
  4. Yield To Maturity (YTM)

    The rate of return anticipated on a bond if held until the maturity date. YTM is considered a long-term bond yield expressed ...
  5. Net Present Value Of Growth Opportunities - NPVGO

    A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. ...
  6. Gresham's Law

    A monetary principle stating that "bad money drives out good." In currency valuation, Gresham's Law states that if a new ...
Trading Center