About
Aggregation In Insurance
In the aftermath of a major catastrophe, the global insurance industry faces an enormous analytical challenge. Thousands of claims may be submitted within days or weeks of the event, ranging from residential property damage to large commercial losses and business interruption claims.
From the outside, the process may appear straightforward: an event occurred, damage resulted, and insurers compensate the affected policyholders.
Behind the scenes, however, the situation is far more complex. Insurance and reinsurance contracts rarely operate on the basis of individual claims alone. Instead, they rely on contractual mechanisms that determine how losses are grouped together for the purpose of applying deductibles, policy limits, and reinsurance protections. This process is known as aggregation.
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