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Claim Frequency Rate Calculator
Frequency analysis exposes trends that drive insurance renewal pricing.
Frequency per 100 units / yr
3.11
Expected loss / unit / yr
$560
Portfolio expected loss / yr
$252,000
How the math works
Frequency = claims ÷ units ÷ years. Per 100 = × 100. Expected loss per unit = frequency × severity.
42 ÷ 450 ÷ 3 = 3.11% or 3.11 per 100 units. × $18k = $560/unit × 450 = $252k annual expected loss.
How to Use
- Enter total claims in period.
- Enter insured units.
- Enter period years.
- Enter avg claim severity.
- Read frequency + severity × frequency.
Frequently Asked Questions
What's a normal claim frequency?
Multifamily: 5-15 claims per 100 units per year. SFR: 3-8. Commercial office: 1-3. Retail: 3-6. Industrial: 1-4. Hotel: 8-15 (high turnover = more slip/fall, water damage). Mix of high-frequency-low-severity (water damage, minor slip/fall) and low-frequency-high-severity (fire, major liability). Frequency trending up 8%+ per year is carrier red flag — insurance will non-renew or raise premium 30-75% at next renewal.
Severity vs frequency?
Severity = avg claim cost. Frequency × severity = expected loss per year. Insurance carriers price on loss cost + ALAE (allocated loss adjustment) + ULAE (unallocated) + overhead + profit. Frequency changes are more controllable than severity. Reducing frequency by 30% is operational (preventive maintenance, safety programs); reducing severity is often outside operator control. Focus on frequency.
How do carriers react to frequency trends?
Low stable frequency: premium decreases 5-15% at renewal. Moderate frequency increase (10-20% YoY): premium increase 10-30%. Severe increase (30%+ YoY) or significant single-claim increase: non-renewal or 50-100%+ premium increase. Carriers track loss ratios: if ratio >80%, you're being subsidized; if >100%, you're a target for non-renewal. Portfolio owners negotiate by sharing 3-year loss history and committing to loss-control investments.
How to reduce frequency?
Preventive maintenance program (reduces water damage, electrical fire, slip/fall): 25-50% frequency reduction. Safety training for staff: 15-30%. Tenant screening (for liability-avoidant tenants): 10-25%. Property condition reports every 6 months: 10-20%. Camera systems for common areas: 15-30%. Institutional operators running all five achieve 40-60% lower frequency than peers at comparable quality tier. This pays back 5-10x through premium savings.
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