separate-frequency-and-severity

name	separate-frequency-and-severity
description	Decompose a loss-ratio move into frequency and severity, since they have opposite responses, before prescribing. Reach for this when the loss ratio moves.

Skill: Separate frequency from severity

Frequency and severity look like one number and need opposite fixes.

Step 1 — Split the loss ratio

Claim count (frequency) vs cost per claim (severity) (§3 #3).

Step 2 — Attribute severity

Social inflation, mix shift, or reserve strengthening.

Step 3 — Attribute frequency

Risk selection, exposure growth, or external trend.

Step 4 — Match the response

Risk-selection fix for frequency; pricing/claims fix for severity.

Output

A frequency/severity split, an attribution of each, and the matched response.