Company: AIZ
Filing Date: 2025-02-20
Form Type: 10-K
Source: 0001267238-25-000008
Chunk: 108

Company: ASSURANT, INC.
Filing Date: 2025-02-20
Form: 10-K
Item: Item 7
Chunk 108
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 due consideration to the potential variability of these factors. 

While management has used judgment in establishing its best estimate of required reserves, different assumptions and variables could lead to significantly different reserve estimates. Two key measures of loss activity are loss frequency, which is a measure of the number of claims per unit of insured exposure, and loss severity, which is a measure of the average size of claims. Factors affecting loss frequency include the effectiveness of loss controls, changes in economic activity and weather patterns. Factors affecting loss severity include changes in policy limits, retentions, rate of inflation and judicial interpretations. 

If the actual level of loss frequency and severity are higher or lower than expected, the ultimate reserves required will be different than management’s estimate. The effect of higher and lower levels of loss frequency and severity on our ultimate costs for claims occurring in 2024 would be as follows:

49

Change in both loss frequency and severity for all Global Lifestyle and Global HousingUltimate cost of claims occurring in 2024Change in cost of claims occurring in 20243% higher$2,765.8 $158.8 2% higher$2,712.3 $105.3 1% higher$2,659.4 $52.4 Base scenario (1)$2,607.0 $— 1% lower$2,555.1 $(51.9)2% lower$2,503.8 $(103.2)3% lower$2,452.9 $(154.1)

(1)Represents the sum of the case reserves and incurred but not reported reserves as of December 31, 2024 for Global Lifestyle and Global Housing.

Non-Core Operations

Short duration contracts in non-core operations primarily consist of the sharing economy and small commercial products previously reported within Global Housing. While the contracts are classified as short duration, the coverages were predominantly commercial liability and have a long reporting and settlement tail compared to property coverages which make up most of our core operations. 

The reserving methodology described for other short duration contacts is applicable for non-core operations. Given the nature of commercial liability coverages and its relatively long claim runoff duration, additional emphasis is placed on elevated loss activity from increasing attorney involvement and analysis of individual case reserve adequacy on known claims. This is done through use of average cost per claim methods that include an allowance for future inflation impacts, detailed open claim inventory analysis, and leveraging industry development patterns to supplement our own historical