Quick guide
How to use this calculator
- Enter policy terms, losses, exposures, probabilities, reserves, or financial assumptions on a consistent basis.
- Use the actual policy wording or internal data definition for every limit, deductible, premium, loss, and recovery input.
- Compare multiple plausible scenarios and treat probabilistic outputs as model results rather than forecasts or coverage determinations.
Calculation method
Calculation method
Each path draws a Poisson claim count and lognormal severities; Poisson additivity splits large means into exact smaller draws before aggregation.
Deterministic currency and ratio calculations use exact fixed-decimal arithmetic. Simulated or distribution-based tools identify their approximation and reproducibility conventions.
Worked example
Worked example
A frequency of 10 claims with 5,000 mean severity can be simulated across 5,000 seeded paths.
Each path draws a Poisson claim count and lognormal severities; Poisson additivity splits large means into exact smaller draws before aggregation.
Supported inputs
Precision and limits
Insurance and risk scope
This seeded compound Poisson-lognormal simulation is an approximation. It assumes independent claims, constant frequency, one severity distribution, and no policy terms, trend, correlation, or catastrophe clustering. Frequency is capped at 250 and simulation paths at 20,000 for responsive local calculation.
Policy wording controls
Actual deductibles, exclusions, valuation clauses, waiting periods, sublimits, aggregates, reinsurance terms, and legal coverage depend on the contract and jurisdiction. The calculator cannot interpret or bind coverage.
Model and data consistency
Keep gross versus net, written versus earned, paid versus incurred, exposure periods, probability horizons, and currency bases consistent. Historical averages and probability models do not guarantee future outcomes.
No quote or professional determination
Results do not quote a premium, approve a claim, establish an actuarial reserve, determine regulatory capital, recommend self-insurance, or replace an insurer, broker, actuary, accountant, risk professional, or legal adviser.
Precision and privacy
Plain decimals accept up to 30 digits and 12 decimal places. Calculations remain in this browser and raw entered values are not submitted to 365CALCS.COM.
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