Which type of loss triangulation focuses on severity?

The focus on severity in loss triangulation is best represented by the concept of Paid Loss - Severity. This approach specifically examines the amount paid out for claims and evaluates how severe those claims are on average. By analyzing paid losses over time, organizations can identify the trends in severity, which can help in understanding the financial impact of larger claims.

This method allows insurers to assess the distribution and frequency of high-severity claims as they develop over time, gaining insights into the risk portfolio. Understanding paid loss severity is crucial, as it enables the insurance company to make informed decisions regarding underwriting, reserves, and pricing strategies.

In contrast, the other options, while useful in their own contexts, do not focus primarily on severity. For instance, Claims Count - Frequency looks at how often claims are made, and Claim Payout - Timing examines the timing of when payouts occur. Incurred Loss - Severity does involve severity but focuses more broadly on incurred losses rather than specifically on those that have been paid out, which can differ from an organization's perspective on actual incurred severity.