experience rating


Also found in: Financial.

experience rating

[ikspir′ē·əns]
Etymology: L, experientia, testing, rata, proportion
a system used by insurance companies in the United States to set the premium to be paid by the insured on the basis of the risk to the company of providing the insurance. Experience rating may lead to very high malpractice premiums in some medical specialties, for the insurance company calculates the premium on the basis of settlements made in related malpractice cases during a specified period. Experience rating is also used to set annual membership health maintenance fees in organizations in which the cost of providing the services in a previous accounting period is used to determine the premiums for the next fiscal year.

experience rating

An insurance rating method which predicts a group's future medical costs based on its past experience (i.e., the actual cost of providing healthcare coverage to the group during a given period of time based on the group's claim history). With experience rating, the insurer calculates the group's insurance premium based on its own—not the overall community's—experience.

experience rating

1. A projection of the cost of an insurance policy (e.g., of a malpractice insurance policy) based on the claims history of the person or party seeking to be insured.
2. A calculation of future insurance payments based on historical data.

experience rating,

n a determination of the premium rate for a particular group partially or wholly on the basis of that group's own experience. Age, sex, use, and costs of services provided determine the premium.
References in periodicals archive ?
Most experience rating programs compare employers that are in the same industry classification.
Ratner demonstrates that if those funds are repaid through an increase in experience rating, unemployment will decrease because of better incentives.
22, 2012 /PRNewswire/ -- A new research report published by Temkin Group, 2012 Temkin Experience Ratings, rates the customer experience of 206 large companies across 18 industries.
Similarly, a minimum tax rate ensures that an employer's tax rate will not drop below a specified floor, no matter how much its experience rating improves.
To understand this concept, it's necessary to have a working understanding of how the experience rating plan works, because it produces an experience mod that is applied to almost all workers' comp policies.
Adjusting insurance premiums through experience rating has two benefits: (1) cross-subsidization of high-risk subscribers by those subscribers of low risk is reduced and (2) high-risk subscribers are given incentives to find cost-effective ways to reduce risk.
The question of whether or not experience rating of physicians for medical liability insurance is a good idea remains wide open.
Interestingly, in our brand reputation surveys Lexus rated by far the up-and-comer, and with its run-away customer experience rating among the wealthy, Lexus has arrived.
a shared-services organization serving the workers compensation industry, offers a comprehensive array of products and services that enable insurers and other stakeholders to access and use workers compensation information to establish accurate loss costs, calculate experience rating modifications, manage residual market mechanisms, and reduce overall costs.
a shared-services organization serving the workers compensation industry, offers a comprehensive array of products and services that enable insurers and other stakeholders to access and use workers compensation data to establish accurate loss costs, calculate experience rating modifications, manage residual market mechanisms, and reduce overall costs.
NCCI, a shared-services organization serving the workers' compensation industry, offers a comprehensive array of products and services that enable insurers and other stakeholders to access and use workers' compensation data to establish accurate loss costs, calculate experience rating modifications, manage residual market mechanisms and reduce overall costs.
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