What is the term for the 'worst case scenario' loss estimation?

The term for the 'worst case scenario' loss estimation is indeed the concept termed as maximum probable loss. This is a critical measure in risk management and insurance that represents the highest financial loss that an insurer might expect to occur from a particular event, with a specified level of confidence over a certain time period. It is used to assess the financial implications of severe yet plausible scenarios in order to help insurers prepare for potential risks.

Maximum probable loss is often utilized in underwriting and pricing decisions, enabling an insurer to determine adequate reserves and pricing strategies based on the most significant loss exposures they could realistically face, as opposed to more average or expected loss scenarios.

The other terms, while relevant in the context of risk and loss assessment, do not specifically describe the extreme loss scenario. Expected loss refers to the average loss anticipated over a given period and may not capture potential outliers or extreme events. Threshold loss indicates a level of loss that may trigger certain actions or responses, but it does not inherently represent the maximum potential loss. Aggregate loss quantifies total losses over a particular period across multiple events or risks but does not specifically focus on the worst-case singular event.