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
Probability below threshold = normal CDF of (threshold return − horizon mean return) ÷ horizon volatility.
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 portfolio with 6% expected return and 15% volatility can estimate the chance of any one-year loss.
Probability below threshold = normal CDF of (threshold return − horizon mean return) ÷ horizon volatility.
Supported inputs
Precision and limits
Insurance and risk scope
This approximation assumes normally distributed, independent returns and square-root-of-time volatility scaling. It can materially understate tail losses and is not a forecast.
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Results do not quote a premium, approve a claim, establish an actuarial reserve, determine regulatory capital, recommend self-insurance, or replace an insurer, broker, actuary,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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