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📋 '''Rating table''' is a structured reference — typically presented as a grid, matrix, or schedule — that an [[Definition:Insurance carrier | insurer]] uses to determine the [[Definition:Premium | premium]] rate applicable to a given risk based on defined classification variables. In insurance, rating tables translate [[Definition:Underwriting | underwriting]] criteria such as age, occupation, geographic location, building construction type, claims history, or coverage limits into specific rate factors or base rates that, when combined, produce the price charged to a [[Definition:Policyholder | policyholder]]. They are the operational backbone of [[Definition:Rating | rating]] in both personal and commercial lines, encoding actuarial judgement into a format that [[Definition:Underwriter | underwriters]], systems, and distribution partners can apply consistently.

⚙️ A typical rating table begins with a [[Definition:Base rate | base rate]] for a reference class of risk, then applies multiplicative or additive factors to adjust for characteristics that increase or decrease expected [[Definition:Loss cost | loss costs]]. In [[Definition:Motor insurance | motor insurance]], for instance, a table might assign factors for driver age band, vehicle group, territory, and claims-free years — the product of which yields the premium for an individual policy. In [[Definition:Life insurance | life insurance]], mortality rating tables assign rates by age, gender (where permitted), smoking status, and health classification. Modern [[Definition:Rating engine | rating engines]] in [[Definition:Insurtech | insurtech]] platforms digitise these tables, enabling real-time quoting across distribution channels. Regulatory approaches vary: in parts of the United States, [[Definition:Rate filing | rate filings]] must include detailed rating tables for regulatory review, whereas in the UK and many European markets under [[Definition:Solvency II | Solvency II]], the supervisory focus is more on overall [[Definition:Rate adequacy | rate adequacy]] and [[Definition:Pricing model | model governance]] than line-item table approval.

📊 Well-constructed rating tables are central to an insurer's competitive positioning and financial performance. A table that accurately reflects underlying risk segmentation allows the insurer to price attractively for better risks while avoiding [[Definition:Adverse selection | adverse selection]] — the tendency for higher-risk buyers to gravitate toward insurers whose tables do not adequately differentiate risk. Conversely, an outdated or coarsely segmented table can lead to systematic mispricing, attracting unprofitable business and repelling desirable risks. As [[Definition:Predictive modelling | predictive analytics]] and [[Definition:Machine learning | machine learning]] advance, many insurers are supplementing or replacing traditional rating tables with [[Definition:Generalised linear model (GLM) | generalised linear models]] and more granular algorithmic approaches — though the rating table remains a foundational concept and, in many jurisdictions and lines, the primary tool for translating risk into price.

'''Related concepts:'''
{{Div col|colwidth=20em}}
* [[Definition:Base rate]]
* [[Definition:Rating engine]]
* [[Definition:Rate filing]]
* [[Definition:Predictive modelling]]
* [[Definition:Adverse selection]]
* [[Definition:Generalised linear model (GLM)]]
{{Div col end}}

Definition:Rating table - Revision history

PlumBot: Bot: Creating new article from JSON