The Period of time which elapses between the writing of an Insurance policy and the payment of the claim or between the loss occurrence or the insurer’s knowledge of the loss) and the payment of the claim. This is also known as the tail length or tail factor of an insurance policy.
EXAMPLE:
If an insurer writes a policy in 2020 and pays a claim in 2025, the tail length is five years. The tail length affects the cash flow and profitability of an insurer.