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ALAE: Allocated Loss Adjustment Expenses are costs associated with investigating and settling a claim.

Bonus-Malus System: Bonus-Malus is Latin for 'good-bad'. Bonus-Malus systems can can lower or raise a policyholder's premium based on their claim history.

Caveat Emptor: A Latin phrase that translates to "let the buyer beware".

E&O Insurance: Errors and omission insurance protects providers of professional services from claims of negligence.

LOESS: Locally Estimated Scatterplot Smoothing is a regression method in which, at each data point, a linear or quadratic local polynomial is fitted using only nearby data points. This video by Taylor Thiel,The Actuarial Data Scientist, provides a fantastic explanation.

MVR: A motor vehicle report, or record, contains a driver's public record of traffic violation convictions. It is used to assess an insured's driving safety record, the "First Mandatory Factor" in California's Rating Factor Regulations.

YDE: A driver's years of driving experience, the "Third Mandatory Factor" in California's Rating Factor Regulations.

More Vocabuary

For more terms, check out this glossary published by the SOA.