ABSTRACT
Chapter 6 presents the distinction between the concepts of the aggregation of losses and the allocation of losses. Both concepts are used to determine whether a certain loss is within the scope of the (re)insurance cover. Yet, they respond to different aspects of the scope of cover. The concept of aggregation is used to determine whether a loss is within the (re)insurance contract’s quantitative scope of cover whereas the concept of allocation is used to assess whether a loss is within the contract’s temporal scope of cover.
Chapter 6 addresses the relation between the aggregation and the allocation of losses. There are situations where multiple individual losses arise from one event or cause but might occur in different (re)insurance contract periods. This raises the question whether multiple individual losses are to be allocated to the correct policy period in a first step and that only those losses that are allocated to the same policy period are then to be aggregated or whether all the individual losses arising from the same event or cause are to be aggregated and the aggregate is then to be allocated to a policy year.
