The Expected Losses for a firm is the amount of loss an average firm reporting the same exposures in the same classifications would have had during the Experience Period (usually three policy years).

Each rating year the NCCI or respective rating bureau calculates the Expected Loss Rates for each classification and each of the three years in the Experience Period. These rates are based on the reported exposures and claim costs for injuries occurring during the Experience Period within each classification for all firms.

An insured's Expected Losses are calculated for each classification and each year in the Experience Period by multiplying the Expected Loss Rate by the insured's reported exposures by year and classification. The sum of these amounts is the insured's Expected Loss.