Experience Rating
Statistical procedure used to calculate a premium rate based on the loss experience of an insured group. Applied in group insurance, it is the opposite of manual rates. Here the premiums paid are related to actual claims and expense experience expected for that specific group. In prospective rating, the past three years loss experience of the insured is the basis for the premium calculation for the current year of coverage. In retrospective rating, the current premium rate for the current period of time is modified at the close of that period to reflect actual loss experience. The premium actually paid then can be adjusted, subject to a pre-agreed minimum and maximum rate.
Popular Insurance Terms
Insurance coverage for accidents and sickness that are not job related. ...
Personal property insurance that provides all-risks coverage for wedding presents, wherever they may be in the world, until they are permanently located. Because the new owners of wedding ...
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Coverage for specialists in various professional fields. Since basic liability policies do not protect against situations arising out of business or professional pursuits, professional ...
Sample of n elements selected from a population of A? elements in such a way that the sample has essentially the same characteristics as the population. The random sample serves as the ...
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Statement of the financial condition of the insurance company, as well as significant events during the year in which the company has been involved and/or that have affected the company. ...
Right of a beneficiary of a life insurance policy to exchange the future installments due that beneficiary for a lump sum distribution. ...
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