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Chapter 6 Losses and LAE

 * This Chapter will be about how to estimate Loses and Loss Adjustment Expenses
 * Losses and LAE form the major portion of insurer's costs and hence form the major portion of premuims as well
 * Claim : is the demand for compensation by a claimant (the insured or a third party) for damages covered under the insurance contract
 * Losses : are the amount of compensation
 * This chapter covers:
 * 1) The disfferet types of insurance losses
 * 2) How the loss data is aggregated for ratemaking analysis
 * 3) Common metrics involving loss
 * 4) Adjustments made to historical loss data to make it relvant for estimatign future losses in the context of ratemaking. These adjustments include:
 * Extraordinary loss events
 * Changes in benefit levels
 * Changes in loss estimates as immature claims become mature
 * Changes in loss cost levels over time
 * 1) Treatment of loss adjustment expenses