Direct and Assumed Paid Losses and ALAE

  • Insurance
  • Losses
  • Basic

Paid losses and loss adjustment expenses (LAE) incurred by an Insurance Company include indemnity payments made to insureds, and expenses paid to other parties, such as attorneys and third party claims administrators. Payments may be incurred by the Insurance Company for policies directly issued to policyholders, and on an assumed basis for policies assumed from a Ceding Entity.

This OnDemand Learning session provides examples of direct and assumed paid losses and allocated loss adjustment expenses including the journal entries used to record the paid activity in the Insurance Company’s financial statements.