How is the premium determined for large companies with established claims history?

The premium for large companies with an established claims history is determined through experience rating. This approach takes into account the specific claims experience of the company over a certain period, typically reflecting how much they have had to pay out in claims compared to what they have paid in premiums. This historical data is significant because it enables insurers to assess the risk more accurately.

For large companies, having an established claims history offers insurers reliable information to predict future claims. If the company's claims history shows that they have lower claims than average, they may receive lower premiums. Conversely, if they have a higher-than-average claims history, the premiums could increase. The experience rating process is more tailored and reflects the actual risk posed by that specific company, making it a preferred method for pricing for larger entities with substantial data on claims.