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📋 '''Per-occurrence loss''' is the total amount of insured loss attributable to a single event or occurrence, aggregated across all affected [[Definition:Policy | policies]] and [[Definition:Claim | claims]] within an [[Definition:Insurance carrier | insurer's]] or [[Definition:Reinsurer | reinsurer's]] portfolio. In insurance and [[Definition:Reinsurance | reinsurance]] practice, this figure is the essential building block for triggering [[Definition:Per-occurrence excess of loss reinsurance | per-occurrence excess of loss]] recoveries, testing [[Definition:Retention | retention]] adequacy, and reporting to [[Definition:Rating agency | rating agencies]] and regulators after a major event.

⚙️ Calculating a per-occurrence loss starts with defining the boundaries of the occurrence itself. Contract language — particularly the [[Definition:Hours clause | hours clause]] in catastrophe treaties — specifies the time window and geographic scope within which individual claims can be grouped into a single occurrence. An insurer hit by a Category 4 hurricane, for instance, aggregates all [[Definition:Property insurance | property]] and [[Definition:Business interruption insurance | business interruption]] claims caused by that storm into one per-occurrence loss total. The accuracy of this aggregation directly determines whether [[Definition:Reinsurance recovery | reinsurance recoveries]] attach and how much the cedent retains net. [[Definition:Loss adjustment expense (LAE) | Loss adjustment expenses]] may or may not be included in the per-occurrence calculation depending on treaty wording.

💡 Getting the per-occurrence loss figure right has profound financial consequences. An undercount can leave recoverable reinsurance on the table; an overcount — or the improper merging of two distinct events into one — invites coverage disputes. After large [[Definition:Natural catastrophe | natural catastrophes]], the industry often spends months refining occurrence loss estimates as [[Definition:Claim | claims]] develop and courts interpret policy wordings. [[Definition:Catastrophe model | Catastrophe modelers]] produce per-occurrence loss distributions that feed directly into an insurer's [[Definition:Probable maximum loss (PML) | probable maximum loss]] calculations and inform how much [[Definition:Reinsurance | reinsurance]] to purchase. In short, the per-occurrence loss is not merely an accounting output — it is the pivot around which risk transfer decisions and capital allocation revolve.

'''Related concepts:'''
{{Div col|colwidth=20em}}
* [[Definition:Per-occurrence excess of loss reinsurance]]
* [[Definition:Hours clause]]
* [[Definition:Probable maximum loss (PML)]]
* [[Definition:Aggregate loss]]
* [[Definition:Loss adjustment expense (LAE)]]
* [[Definition:Catastrophe model]]
{{Div col end}}

Definition:Per-occurrence loss - Revision history

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