01 / The meaning
What it means.
A raw count can be misleading when a business grows. Five incidents across a much larger fleet may represent a lower rate than three incidents in a small fleet. Decide whether the measure includes all incidents, only notified claims or only claims above the excess. Keep the denominator and reporting period consistent when comparing results.
Frequency is different from severity, which describes the size of each loss. Repeated small incidents can indicate a practical control problem even where their total cost is manageable. Conversely, an infrequent event may be financially severe. Insurers can consider both when assessing a risk, alongside the nature of the operations and the reliability of the claims history.
02 / Put it in context
A practical example.
Hypothetical example: A delivery business records eight reversing incidents across forty vehicles over one year. It compares that rate with prior years and reviews depot layout and driver routines. The analysis may support a better risk discussion, but it does not promise a lower premium.
This example illustrates the term. It does not predict a claim outcome.
03 / Read the detail
What to check.
- Define whether the count includes incidents, claims or paid claims.
- Use a consistent exposure measure and time period.
- Review recurring causes separately from large one-off losses.
04 / Start a useful conversation
A question for your broker.
Has the incident rate changed after allowing for the size of our operations?
05 / Connect the terms
Keep the meaning in context.
06 / Apply it to your business
Related insurance guides.
Further reading
Read the source guidance alongside the relevant policy wording.
General information only. This does not take into account your objectives, financial situation or needs. Before acting, consider whether the information is appropriate for you. Cover is subject to insurer acceptance and the policy terms, conditions, limits and exclusions. Read the Financial Services Guide and the relevant PDS (where applicable) and/or policy wording before deciding.
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