Severity vs. Frequency looks at the loss rate that is more predictable on low severity, high
frequency lines of insurance than it is on high severity, low frequency lines. Which of the
examples below can best be used to determine the loss rate for a high severity, low frequency
line of insurance.
a. A significant tropical storm which does extensive damage to farmlands.
b. A severe forest fire which frequently occurs during the summer months.
c. The COVID 19 pandemic which significantly affected nearly all segments of countries
globally.
d. A catastrophic hurricane that is rated as a category 2 or above..
Severity vs- Frequency looks at the loss rate that is more predictable.pdf
1. Severity vs. Frequency looks at the loss rate that is more predictable on low severity, high
frequency lines of insurance than it is on high severity, low frequency lines. Which of the
examples below can best be used to determine the loss rate for a high severity, low frequency
line of insurance.
a. A significant tropical storm which does extensive damage to farmlands.
b. A severe forest fire which frequently occurs during the summer months.
c. The COVID 19 pandemic which significantly affected nearly all segments of countries
globally.
d. A catastrophic hurricane that is rated as a category 2 or above.
