Risk Modelling glossary
What is a Return Period?
The average recurrence interval of a loss of a given magnitude. A 1-in-100 year event has a 1% annual probability.
Definition
Return Period
The average recurrence interval of a loss of a given magnitude. A 1-in-100 year event has a 1% annual probability.
Example
How it works in practice
A catastrophe model estimates that an earthquake causing $5 billion in insured losses to a Japanese insurer has a return period of 200 years. This means there is a 0.5% probability of such an event occurring in any single year. It does not mean the event will occur exactly once every 200 years; three such events could theoretically happen in the same decade.
Related terms
Related glossary entries
A
B
C
Calculation AgentILSCat BondILSCatastrophe ModelRisk ModellingCCRIF (Caribbean Catastrophe Risk Insurance Facility)ILSCedantReinsuranceCoCo (Contingent Convertible)CreditCollateralILSCollateralised ReinsuranceILSConditional Expected Loss (CEL)ILSCorrelationILSCouponILSCoupon DeferralCreditCyber Cat BondCyber
D
E
ESGILSExhaustion PointILSExpected Loss (EL)ILSExpense LoadILSExposureGeneral InsuranceExtension RiskILS
G
H
I
IBRD (International Bank for Reconstruction and Development)ILSILW (Industry Loss Warranty)ReinsuranceIndemnity TriggerILSIndustry Loss Index TriggerILS
L
M
Mark-to-MarketILSMark-to-ModelILSMaturityILSMEL (Multiple of Expected Loss)ILSModelled Loss TriggerILSMoral HazardGeneral Insurance
N
O
P
Parametric TriggerILSPCS (Property Claims Services)ILSPeak PerilILSPerilGeneral InsurancePERILS AGILSPremiumGeneral InsuranceProbability of First Loss (PFL)ILSProbable Maximum Loss (PML)Risk ModellingProportional PayoutILS
R
RansomwareCyberReg SILSReinsuranceReinsuranceResilience BondILSRetrocessionReinsuranceReturn PeriodRisk ModellingRisk LoadILSRisk-Free RateCreditRoadshowILSRT1 (Restricted Tier 1)CreditRule 144AILS
S
SCR (Solvency Capital Requirement)General InsuranceSeasonalityILSSecondary MarketILSSharpe RatioILSSidecarILSSilent CyberCyberSOFRILSSolvency IIGeneral InsuranceSpecial Purpose Vehicle (SPV)ILSSpreadILSStructuring AgentILSSubordinated DebtCreditSupply Chain AttackCyber
T
V
W
Z
Learn ILS properly with ILS101
Move from definitions into structures, pricing, triggers, reinsurance applications, and specialist risk topics.
Start Learning