Loss Frequency
Loss Frequency :
A parameter of loss statistics. It states the relative frequency of losses as a percentage or permillage of a given total (e.g. number of inhabitants, buildings or insurance contracts in a given area). It is calculated by diving the number of affected people/objects in a certain period by their total number in the area under observation and multiplying the result by 100 (to produce a percentage figure) or 1000 (to produce a permillage figure). As far as insurance contracts are concerned, one solution that finds application particularly in the commercial and industrial business - in addition to striving for better loss prevention - is incorporating a suitable deducible if loss frequencies are repeatedly high in the sector of minor losses, because as a rule these minor losses do not represent a strain for policyholders that would endanger their business
