Claim Frequency And Severity Calculator

Work out claim frequency and severity instantly with clear inputs, formula shown and shareable results.

About Claim Frequency And Severity Calculator

Actuarial pricing decomposes loss cost into frequency — claims per exposure unit — and severity, the average cost per claim. Their product is the pure premium, to which expense and profit loadings are added. Separating them matters because they respond to different drivers and trend at different rates.

Formulas

Frequency

Frequency = Number of claims / Exposure units

Severity

Severity = Total claims paid / Number of claims

Pure premium

Pure premium = Frequency x Severity

Worked example

With the default values below, Claim Frequency And Severity Calculator returns Pure (risk) premium per exposure unit of $5,375.00. Change any input above and every figure here is recalculated in your browser.

Inputs used

Number of claims: 860
Exposure units (policies or vehicle-years): 24,000
Total claims paid: 129,000,000
Premium charged per exposure unit: 7,200

Results

Pure (risk) premium per exposure unit: $5,375.00
Claim frequency: 3.583%
Average claim severity: $150,000.00
Implied loss ratio at current premium: 74.65%

Step by step

1Values used
2Frequency
3Severity
4Pure premium
5Pure (risk) premium per exposure unit= 5,375.00
6Claim frequency= 3.583
7Average claim severity= 150,000.00
8Implied loss ratio at current premium= 74.65

Assumptions and limits

The result is derived only from the 4 inputs listed above. Anything not among them is not part of the calculation.
In particular, this calculator does not take inflation, tax or compounding frequency into account.
Figures are rounded for display to 3 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
Indicative estimate only. Fees, entitlements, limits and formulas vary by jurisdiction, statute, policy wording and the facts of the case. This is not legal, tax, insurance or financial advice — confirm with a qualified professional or the relevant authority.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Indicative estimate only. Fees, entitlements, limits and formulas vary by jurisdiction, statute, policy wording and the facts of the case. This is not legal, tax, insurance or financial advice — confirm with a qualified professional or the relevant authority.

Frequently Asked Questions

Why separate frequency and severity?

Because they behave differently: frequency responds to behaviour and deductibles, severity to inflation, medical costs and repair costs. Trending them separately is far more accurate.

What is an exposure unit?

Whatever best measures risk exposure — vehicle-years for motor, insured-value-years for property, payroll for workers compensation.