Frequency and severity Flashcards
Explain the principal of frequency and severity
1
Q
Frequency is
A
How often something happens
2
Q
Severity is
A
How bad something is when it happens
3
Q
Frequency is
A
how often or the number of claims that will be made
4
Q
Severity is
A
the size of the claim
5
Q
An oil rig exploding would be
High frequency low severity
Low frequency high severity
A
Low frequency high severity
6
Q
A claim for a broken shop window would be
High frequency low severity
Low frequency high severity
A
High frequency low severity
