Territorial Grouping Of Risks
Method of classifying risks to establish equitable rates. In many property and liability insurance lines, the location of an insured has a significant impact on the loss experience. For example, in automobile insurance the chance of a policy holder sustaining a loss is much greater in New York City than in rural Iowa. In lines like workers compensation, insurers may consider the attitude of the state courts and its impact on the cost of claims in that state. The insurer's task is to define a territorial grouping that has an exposure that is either smaller or greater than the standard, yet the group must be large enough to provide significant loss experience for rate making.
Popular Insurance Terms
Rate not subsequently adjusted. The rate stays in effect regardless of an insured's subsequent loss record. ...
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Insurance protection written in the form of a single line policy. ...
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Adjustment of the burning cost ratio for the increase in number and size of losses (losses likely in excess of that used in the unadjusted burning cost rate), incurred but not reported ...
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Bond derivatives of short-term duration whose principal or coupon value is determined by a market index. Market indexes that can be utilized include securities, commodity prices, and ...
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