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At the most simple degree, preliminary rate-making entails wanting at the frequency and severity of insured perils and the anticipated common payout resulting from these perils. Thereafter an insurance coverage company will accumulate historical loss-information, carry the loss knowledge to present value , and evaluate these prior losses to the premium collected in an effort to assess charge adequacy. 24 Loss ratios and expense loads are also used. Ranking for various danger traits involves – at the most basic stage – comparing the losses with “loss relativities”—a policy with twice as many losses would, therefore, be charged twice as much. Extra complicated multivariate analyses are sometimes used when multiple characteristics are involved and a univariate analysis could produce confounded results. Other statistical strategies may be utilized in assessing the probability of future losses.