insurance::claim-exposure

Claim Exposure

The total potential financial liability an insurer faces from reported and unreported claims at a given date.

Canonical Definition

Claim exposure is the aggregate potential financial liability an insurer faces from all claims — reported and unreported — at a given point in time. It encompasses case reserves on open claims, IBNR reserves, and allocated loss adjustment expenses (ALAE). Claim exposure is a key metric for capital adequacy assessment, reinsurance purchasing, and management reporting. It differs from premium exposure, which measures the risk accepted at policy inception. Source: CAS Glossary of Actuarial and Financial Terms; Lloyd's Market Glossary.