What is Exposure Basis?
Exposure Basis The underlying metric or unit used to quantify the amount of risk an insurer is covering, such as number of vehicles, payroll, sales, or property value.
Source: CFA Institute, IFRS Foundation, FASB (GAAP), Basel III Framework
How is “Exposure Basis” Used in Practice?
Policy premiums are calculated using the exposure basis, such as annual revenue for liability insurance or insured value for property coverage.
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Who Needs to Know This Term?
- Financial Analysts
- Bankers
- Traders
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What is Exposure Basis?
The underlying metric or unit used to quantify the amount of risk an insurer is covering, such as number of vehicles, payroll, sales, or property value.
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