• Allocation expenses (ALAE) are expenses related to a specific insured event.
  • ALAE, together with Unallocated Claims Adjustment Expenses (ULAE), is the insurer’s estimate of the money it will pay for claims and costs.
  • ULAE-related costs are more general and may include overhead, investigations, and salaries.
  • Small, simple claims are easiest for an insurance company to settle, and often require less ALAE compared to claims that can take years to settle.