Aggregate excess of loss

An aggregate excess of loss treaty accumulates, over a period that is usually the underwriting year, every loss meeting the contract conditions, and responds only once that accumulation exceeds an annual aggregate deductible. It differs from per occurrence cover, which compares each event on its own to the retention, and from stop loss, which works on a loss ratio rather than an amount. A per loss filter, the qualifying deductible, commonly screens small claims out of the accumulation so the cover answers a build-up of meaningful events rather than attritional experience. The problem it solves is frequency: a season stacking six medium windstorms, none of which reaches the per occurrence retention, can cost more than one large event and finds no answer in the classical forms. Aggregate cover fits that profile exactly, and it has become one of the most sought after structures on secondary perils, hail, flood and wildfire, whose losses grow by accumulation rather than by single peak.

A household insurer buys a 25 million xs 40 million aggregate cover for 2026, with a 2 million qualifying deductible per event. The season brings seven hail episodes costing 3, 11, 4, 9, 1.5, 14 and 6 million. The 1.5 million episode is screened out. The qualifying accumulation reaches 47 million and the cover pays 7 million. No per occurrence layer attaching at 20 million would have paid anything at all.

Aggregate XL, Agg XL, Cat aggregate, Couverture agrégée