{
  "id": "term-pml",
  "type": "term",
  "languages": {
    "en": {
      "id": "term-pml",
      "lang": "en",
      "type": "term",
      "title": "Probable Maximum Loss (PML)",
      "shortDefinition": "The probable maximum loss (PML) is the largest loss expected at a location or for a risk under realistically adverse conditions; it serves as a measure of capacity and reinsurance requirements.",
      "synonyms": [
        "PML"
      ],
      "linesOfBusiness": [
        "Property",
        "Reinsurance"
      ],
      "jurisdictions": [
        "Global"
      ],
      "tags": [
        "Risk assessment",
        "Risk engineering"
      ],
      "relations": {
        "relatedTerms": [
          "term-exposure",
          "term-capacity",
          "riskg-natural-hazards"
        ],
        "partOf": [],
        "appliesTo": [],
        "regulatedBy": [],
        "relevantFor": [],
        "insurableVia": [],
        "mitigatedBy": [],
        "comprises": [],
        "alternativeTo": [],
        "complementedBy": []
      },
      "attribute": null,
      "profile": null,
      "coverageProfile": null,
      "clause": null,
      "legalBasis": [],
      "standards": [],
      "reviewStatus": "expert-reviewed",
      "reviewedBy": "Guido Hesse, Hesse Group Holding AG",
      "lastReviewed": "2026-09-04",
      "version": "0.1.0",
      "updated": "2026-08-31",
      "generated": {
        "by": "process:reconstructed",
        "at": "2026-08-31T00:00:00.000Z"
      },
      "verified": [
        {
          "by": "human:ghesse",
          "at": "2026-09-04T00:00:00.000Z",
          "method": null
        }
      ],
      "staleAfter": null,
      "url": "https://hgh.ch/lexikon/en/knowledge/term/probable-maximum-loss/",
      "alternateUrl": "https://hgh.ch/lexikon/de/wissen/begriff/hoechstschaden-pml/",
      "body": "## Concept\n\nThe PML answers the question: how large will a loss be if an event occurs and significant – but not all – protection measures fail? It therefore sits below the theoretical total loss (maximum foreseeable loss), which assumes all protection systems fail.\n\n## Determination\n\nRisk engineers derive the PML from site surveys, fire compartments, separation distances, protection concepts (sprinklers, plant fire brigade) and interruption scenarios. For natural hazards, modelled return periods replace the single-case analysis.\n\n## Use\n\nPML values determine how much capacity an insurer writes per risk, how co-insurance and layering are structured, and which reinsurance priorities make sense. Misjudgements directly affect the price and security of the programme."
    },
    "de": {
      "id": "term-pml",
      "lang": "de",
      "type": "term",
      "title": "Höchstschaden (PML)",
      "shortDefinition": "Der Probable Maximum Loss (PML) ist der grösste Schaden, der an einem Standort oder für ein Risiko unter realistisch ungünstigen Bedingungen zu erwarten ist, und dient als Mass für Kapazitäts- und Rückversicherungsbedarf.",
      "synonyms": [
        "Probable Maximum Loss",
        "Wahrscheinlicher Höchstschaden"
      ],
      "linesOfBusiness": [
        "Sach",
        "Rückversicherung"
      ],
      "jurisdictions": [
        "Global"
      ],
      "tags": [
        "Risikobewertung",
        "Risk Engineering"
      ],
      "relations": {
        "relatedTerms": [
          "term-exposure",
          "term-capacity",
          "riskg-natural-hazards"
        ],
        "partOf": [],
        "appliesTo": [],
        "regulatedBy": [],
        "relevantFor": [],
        "insurableVia": [],
        "mitigatedBy": [],
        "comprises": [],
        "alternativeTo": [],
        "complementedBy": []
      },
      "attribute": null,
      "profile": null,
      "coverageProfile": null,
      "clause": null,
      "legalBasis": [],
      "standards": [],
      "reviewStatus": "expert-reviewed",
      "reviewedBy": "Guido Hesse, Hesse Group Holding AG",
      "lastReviewed": "2026-09-04",
      "version": "0.1.0",
      "updated": "2026-08-31",
      "generated": {
        "by": "process:reconstructed",
        "at": "2026-08-31T00:00:00.000Z"
      },
      "verified": [
        {
          "by": "human:ghesse",
          "at": "2026-09-04T00:00:00.000Z",
          "method": null
        }
      ],
      "staleAfter": null,
      "url": "https://hgh.ch/lexikon/de/wissen/begriff/hoechstschaden-pml/",
      "alternateUrl": "https://hgh.ch/lexikon/en/knowledge/term/probable-maximum-loss/",
      "body": "## Konzept\n\nDer PML beantwortet die Frage: Wie gross wird ein Schaden, wenn ein Ereignis eintritt und wesentliche, aber nicht alle Schutzmassnahmen versagen? Er liegt damit unter dem theoretischen Totalschaden (Maximum Foreseeable Loss), bei dem sämtliche Schutzsysteme ausfallen.\n\n## Ermittlung\n\nRisk Engineers leiten den PML aus Begehungen, Brandabschnitten, Abständen, Schutzkonzepten (Sprinkler, Werkfeuerwehr) und Unterbrechungsszenarien ab. Für Naturgefahren treten modellierte Wiederkehrperioden an die Stelle der Einzelfallanalyse.\n\n## Verwendung\n\nPML-Werte bestimmen, wie viel Kapazität ein Versicherer pro Risiko zeichnet, wie Mitversicherung und Layering strukturiert werden und welche Rückversicherungsprioritäten sinnvoll sind. Fehleinschätzungen wirken direkt auf Preis und Sicherheit des Programms."
    }
  }
}