average

Definition 1

General: Number or quantity that is in-between (intermediate to) several quantities and numbers. See also mean.

Definition 2

General insurance: The term 'subject to average' means that if the sum insured at the time of a loss is less than the insurable value of the insured property, the amount claimed under the policy will be reduced in proportion to the under-insurance. Also called average clause. See also coinsurance.

Definition 3

Marine insurance: 'Average' means partial (loss); particular-average loss is borne by one party, and general-average loss is shared by all concerned. Now largely replaced with institute cargo clauses A, B, or C.

Definition 4

Quality control: Most common expression of the centering of a distribution computed by dividing the total observed values by the number of observations.

Definition 5

Securities trading: Appropriately weighted mean of a 'basket' of selected securities representing general market behavior. Dow Jones Industrial Average (DJIA), which measures the performance of the stocks of 30 the largest US corporations, is one well-known example.