Claims Frequency Calculator

Claims Frequency is Number of Claims divided by Exposure Units directly — a raw ratio, often a small decimal like 0.05. Frequency Rate re-expresses that same ratio per 100 exposure units (multiplying by 100), which is simply a more readable presentation convention for the identical underlying rate — both describe exactly the same frequency, just scaled differently.

No. Claims Frequency is Number of Claims divided by Exposure Units — it has no term for claim severity at all, since frequency measures how often claims occur, not how large they are. Average Claim Severity only feeds into Total Loss and Loss per Exposure Unit (Pure Premium), which is exactly why actuaries track frequency and severity as separate dimensions rather than one combined loss statistic — a rise in claim frequency and a rise in claim severity have different underlying causes and call for different responses.

Pure Premium is Total Loss (Number of Claims times Average Claim Severity) divided by Exposure Units — the expected loss cost per unit of exposure, before any expense loading or profit margin is added. It's called 'pure' because it reflects only the loss cost; the premium an insurer actually charges adds underwriting expenses, commissions, taxes, and a profit margin on top of pure premium, so the quoted rate is always higher than pure premium alone.

Total Loss is Number of Claims times Average Claim Severity, while Claims Frequency is Number of Claims divided by Exposure Units — the two respond to different inputs. If Exposure Units grows (more policies written) while Number of Claims and Average Claim Severity stay fixed, Total Loss is unchanged but Claims Frequency falls, since the same claim count is now spread across a larger exposure base. This is exactly why frequency, not raw claim counts, is the metric actuaries compare across periods with different portfolio sizes.