Accident-Year Statistics

What Does Accident-Year Statistics Mean?

Accident-year statistics are used by insurance companies to measure the percentage of incoming premiums that are later paid out in loss claims.

Insuranceopedia Explains Accident-Year Statistics

Accident-year statistics compare earned premiums and exposures with losses incurred during a specific fiscal or calendar year. This means that accident-year experience is fully earned within 12 months, regardless of the effective date of the underlying policies. These statistics are a valuable tool for setting premiums for the following year. Because insurers use these figures to predict the next year’s losses, accident-year results feed directly into the rates drivers see when they shop for car insurance quotes. By monitoring and analyzing trends in accident-year statistics, insurance companies can predict the likely extent of their losses. Companies with better accident-year results can usually charge less, which is one reason rates vary so much between the best car insurance companies.