Rating Types/methods

Front 1

Class Rating –

Back 1

A rate charged to a group of policyholders who have similar exposures and experience.

Front 2

Experience Rating –.

Back 2

A rate based on the policyholder’s actual loss history when compared to the loss history of similar risks

Front 3

Individual Rating –

Back 3

A rate used for a policyholder because a large enough pool of similar risks is not available to any other type of rate. Primarily used for commercial any specialty risks because of the number of unique variables involved

Front 4

"A" Rating or Judgment Rating –

Back 4

An individual rate that doesn’t use loss history as a component and that is derived largely from the underwriter’s evaluation and best judgment the risk poses to the insurer.

Front 5

Loss Cost Rating –

Back 5

A rating organization provides insurers with the portion of a rate that does not include provisions for expenses or profit.The expense and profit components to develop the final rate must be added by individual insurers based upon their projections. Loss cost rating is used on risks for which the insurer may not have enough data to develop the rate, other than for expenses and profit.

Front 6

Manual Rating –

Back 6

The use of rates contained in a manual published by the insurer or those of the rating organization of which it is a member.

Front 7

Merit Rating

Back 7

– The use of rates that rewards a policyholder that takes measures to decrease the probability of loss by the implementation of safety programs, loss control programs, etc.

Front 8

Retrospective Rating –

Back 8

The use of rates that adjust the policy premium to reflect the current loss experience of the policyholder. Premium adjustments are subject to minimums and maximums.

Front 9

Schedule Rating –

Back 9

A method of rating property and liability risks by using charges and credits to modify a class rate based on the nature of the particular risk being rated.