Retrospective Premiums Definition & Meaning | Insurance Term | CSIMarket
CSI Market
Sign In | Register

Glossary

Retrospective Premiums

Insurance Term

Retrospective premiums, also known as experience ratings, are a type of insurance pricing model that is commonly used by insurers to adjust the premium rates of policyholders based on their claims history. This model takes into account the actual incurred losses of an insured company over a specified period of time, usually one or more years, and then adjusts the premium rates accordingly to reflect the experience of the insured.

The overall aim of retrospective premiums is to ensure that insurance premiums are fair and equitable. This means that insured companies with a good claims history would pay lower premiums, while those with a poor claims history would pay more. The retrospective premium model also encourages companies to implement risk management measures that can help to reduce their claims.

In the insurance industry, the retrospective premiums model is commonly used for workers* compensation, general liability, and auto insurance policies. Insurers typically calculate retrospective premiums based on the individual loss experience of each policyholder, which takes into account their claim frequency, severity, and other risk factors.

For example, an insured company with a good loss experience may receive a retrospective premium refund after the policy period is over, while one with a poor loss experience may incur an additional premium charge. These adjustments serve as a motivating factor for companies to implement loss control measures to reduce their claims and insurance costs.

Overall, retrospective premiums are an important pricing tool for insurers that enable them to provide more accurate and fair pricing for policyholders, while also encouraging good risk management practices.


More Glossary Terms Beginning with R
  • Radiolabeling
    Process of attaching a radioactive isotope, such as Iodine 131.
    Health Care Term Letter: R
  • Radiopharmaceutical
    A radioactive compound used in radiotherapy or diagnosis.
    Health Care Term Letter: R
  • Randomized Clinical Trial
    A clinical trial in which the participants are assigned randomly to different treatment groups.
    Health Care Term Letter: R
  • Rate of Change ROC
    Rate of Change ROC Untitled Document Rate of Change ROC The Rate of Change (ROC) indicator is similar to momentum, a oscillator that measures the percent change in price from one period to the next. When ROC is above the 0-line and rising, prices are increasing at an increasing rate. If ROC is above the 0 line but is declining, prices are still increasing but at a decreasing rate. On the other han
    Technical Indicator Letter: R
  • Rating Agency Condition
    means the written confirmation or reaffirmation, as the case may be, from each rating agency then rating the notes that any intended action will not result in the downgrading of its then-current rating of any class of notes.
    Financial Term Letter: R
  • Reagent
    A chemical added to a sample under investigation in order to cause a chemical or biological reaction which will enable measurement or identification of a target substance.
    Health Care Term Letter: R
  • Receivables From Customers
    Primarily represents loans to customers which are included in accrued interest and accounts receivable on the Consolidated Balance Sheets.
    Financial Term Letter: R
  • Receivables Turnover Ratio
    A ratio that measures companys ability to collect the loans (Accounts receivables) it has provided to its customers by dividing revenus by accounts recievable. High ratio indicates that company efficiently collects it outstanding recievables. Accounts Receivables Turnover Ratio Formula = (Revenue / Receivables)
    Fundamental Analysis Letter: R
  • Receptor
    a protein on the cell surface or inside the cell that is the binding sites of ligands, including agonists and antagonists.
    Health Care Term Letter: R
  • Recession
    In general usage, the word recession connotes a marked slippage in economic activity. While gross domestic product (GDP) is the broadest measure of economic activity. The recession is often-cited as two consecutive quarters of negative GDP.
    Economy Term Letter: R
  • RECIST
    Response Evaluation Criteria in Solid Tumors, a US standard.
    Health Care Term Letter: R
  • Recombinant
    Novel DNA made by genetic engineering.
    Health Care Term Letter: R