Retrospective Rating

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Retrospective Rating The process of determining the cost of an insurance policy based on the actual loss experience determined as an adjustment to the initial premium payment. In a sentence it is a rating plan that adjusts the premium during the policy period. A Retro coverage period lasts 12 months and can begin any calendar quarter. An insured entity can benefit or be hurt by a retrospectively rated insurance, as premiums rise and fall depending on how many losses they incur. Companies have an incentive to implement further safety and loss controls to avoid increased premiums. Workers' compensation, general liability, and auto liability are some areas where retrospectively rated insurance applies well. In a nutshell one can say it is a loss control mechanism used by insurers #benewinsurance #insurtech #inclusiveinsurance #insurance #reinsurance #takaful

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