The portion of LAE directly attributable to a specific claim: expert fees, legal costs and specific investigation expenses.
Allocated loss adjustment expenses (ALAE) are claim-handling costs directly chargeable to an individual claim file: appointed loss adjuster fees, defense or claimant legal fees, circumstance investigation costs, subrogation recovery expenses. They contrast with ULAE (overhead costs). Depending on accounting convention, ALAE are sometimes included in gross incurred losses (inclusive LAE basis), shifting the loss ratio level, so always check the convention before comparing. On litigious lines (medical liability, construction), ALAE can represent 25–40% of the combined indemnity plus expenses total.
Product liability claim: indemnity 800,000 EUR, ALAE = 150,000 EUR (lawyers) + 40,000 EUR (experts) + 10,000 EUR (investigation) = 200,000 EUR, 25% of total cost.
allocated LAE, frais alloués, defence costs, frais attribuables par sinistre