What term describes the frequency of losses within a defined period?

The concept that describes the frequency of losses within a defined period is known as loss frequency. This term is crucial in the insurance industry as it quantifies how often claims or losses occur over a specific timeframe, providing insight into the risk profile associated with certain types of insurance policies.

Understanding loss frequency helps insurers and underwriters evaluate the likelihood of future claims, which in turn aids in pricing coverage and assessing the overall health of an insurance portfolio. This is particularly important for surplus lines, where understanding unique or higher-risk exposures can guide decisions on coverage and pricing.

The other terms provided in the question—loss ratio, loss reserve, and cumulative losses—serve different purposes. Loss ratio refers to the relationship between the losses incurred and the premiums earned, which helps determine profitability. Loss reserve indicates the amount of money that an insurer sets aside to pay for claims that have occurred but are not yet settled. Cumulative losses represent the total losses that have accumulated over a certain period but do not specifically address the frequency aspect. Hence, loss frequency is the appropriate term to describe the frequency of losses within a defined period.