When evaluating risk, which term refers to the likelihood of a loss occurring?

The term that refers to the likelihood of a loss occurring is frequency. In the context of risk evaluation, frequency is concerned with how often a specific event or loss may happen over a certain period. It helps insurers assess the probability of claims based on historical data or statistical analysis. Understanding frequency allows insurers to set appropriate premiums, manage reserves, and create strategies to mitigate risks.

Other terms like severeness, certainty, and impact relate to different aspects of risk assessment. Severeness typically refers to the potential severity or magnitude of a loss when it occurs, rather than how often it will occur. Certainty speaks to the assurance level regarding the occurrence of an event, and impact deals with the consequences or effects of a loss after it has happened. Thus, frequency precisely captures the concept of likelihood in risk evaluation, making it the correct choice.