Multiple Currency Claim

Multiple Currency Claim

The FGU functionality calculates the distribution for multiple currency claims. Note that a claim is considered as a multiple currency claim when there are more than one currency listed in the Advisory section, even though no advisory figures have been registered.

When calculating the distribution of a claim in multiple currencies, the system applies the following rules:

  1. Paid Loss is calculated using the Paid Loss split between the currencies. If expenses are Part of Liability, the Paid Expenses are calculated using the same split.
  2. Incurred Loss is calculated using the Incurred currency split. Any ACR amounts are not included in the calculation of this split. If expenses are Part of Liability, Reserve Expenses are calculated using the same split.
  3. Reserve Loss is the difference between the Incurred Loss and the Paid Loss,.
  4. Incurred Loss with ACR is calculated using the Incurred with ACR currency split. If expenses are Part of Liability, ACR LAE calculation applies the same split.
  5. ACR is the difference between the Incurred with ACR and Incurred Loss.

The distribution list displays different limit sets reflecting Payment limits, Incurred Limits, and Incurred with ACR limits.

The calculation of the distribution for Paid Loss applies the currency split for paid loss, for incurred loss the incurred currency split is applied, and reserves are calculated as the difference between the two. When splitting between loss and expense amounts the system applies the split between these two advisory amounts per currency, and not across all currencies. Due to the differences in the excess points applied, you may experience that the system calculates Reserve figures which are negative, or even reserves in a currency for which none is recorded in the From Ground Up advisory.

Be aware that reserves are NOT allocated if the total of reserves equal zero across all currencies.

Also note that when expenses are defined as part of liability/none, nothing is allocated to either if the total loss reserve and expense reserve per currency is zero.