meaning of accident year data

accident year data meaning in Insurance Dictionary

A method of organizing loss and visibility information of an insurer or band of insurers or within a book of business, to ensure that all losings connected with accidents happening within a given calendar year and all sorts of premium gained throughout that same calendar year tend to be compared. Therefore, regardless of individual plan durations and aside from whenever a reduction is reported or perhaps is compensated, accident year data 2009 will consist of all premiums acquired during 2009 and certainly will consist of all losings occurring in 2009. Rate-making companies make use of both accident year data and policy 12 months data in their analyses of rate adequacy. For instance, employees compensation reduction development factors (LDFs) promulgated because of the National Council on payment Insurance (NCCI) tend to be created from accident year data.