Which term is the count of events per policy year or calendar year?

Which term is the count of events per policy year or calendar year?

• A. Hazard
• B. Duplication
• C. Expected Losses
• D. Frequency

Answer: (D)

Frequency is the count of events that occur in a given time period, such as per policy year or per calendar year. It measures how often losses happen, not how big they are. In risk modeling you separate frequency (how many events) from severity (how large each loss is); together they help explain expected losses, since E[L] = E[Frequency] × E[Severity]. Hazard refers to conditions that raise the chance of a loss, while duplication is not the term used for counting events, and expected losses describe the total value of losses, not the simple count.

Frequency is the count of events that occur in a given time period, such as per policy year or per calendar year. It measures how often losses happen, not how big they are. In risk modeling you separate frequency (how many events) from severity (how large each loss is); together they help explain expected losses, since E[L] = E[Frequency] × E[Severity]. Hazard refers to conditions that raise the chance of a loss, while duplication is not the term used for counting events, and expected losses describe the total value of losses, not the simple count.