What does Loss Pick mean? Read on to discover the definition & meaning of the term Loss Pick - to help you better understand the language used in insurance policies.
Otherwise known as "expected losses," an underwriter's (or actuary's) estimation of future losses based on past losses. Typically, 5 years of historical loss data will be used to predict an estimate of a future year's losses. Loss picks are used to quantify an estimate of the loss component of a typical loss sensitive rating plan such as a retrospective program. The premium is composed of expenses and the loss pick.
We hope the you have a better understanding of the meaning of Loss Pick.