Measure of the activity or area exposed to risk, the basis for calculating frequency and pure premium.
Exposure is the quantitative measure of the area or activity exposed to risk over a given period. It must be chosen to be proportional to risk and consistent with the claim count. Common exposure units include: policy-years (one policy in force for one year = 1 unit), vehicle-years (motor), sums insured (property), headcount (workers' compensation), revenues (professional liability), passenger-kilometers (transport). Frequency and pure premium are calculated per exposure unit, enabling comparison across portfolios of different sizes. A poorly chosen exposure measure creates systematic pricing biases.
A motor portfolio grows from 8,000 to 12,000 vehicle-years between 2022 and 2023. Frequency falls from 12.0% to 11.5%: improved performance despite a higher absolute claim count.
exposure, unité d'exposition, exposition au risque, exposure base, mesure d'exposition