In Chapter 10, page 43, the notes state "The total indirect expenses (unallocated claims expenses and unallocated loss adjustment expenses) are needed to calculate reserves for indirect expenses" What is the difference between unallocated claims expenses and unallocated loss adjustment expenses? Thanks Dan
Hi Dan The distinction is not particularly clear and the two terms could well be used interchangeably in practice. Conceivably there is a difference though, for example you may consider: • loss adjustment expenses to be specifically the costs of assessing claim amounts • any other claims expenses to include items such as the salaries of back office staff who deal with correspondence, answer claim-related customer queries etc.
