Question

5 Which rating method provides an insurer with that portion of a rate that does not include provisions of expenses (other than adjusting expense) or profit and is based on historical aggregate loss and loss adjustment expenses projected through development to their ultimate value and through trending to a future point in time?

Answer 1

Answer:

loss rating method

Explanation:

In insurance terms, loss ratings is a technique generally used for large clients where the client's loss history is included as a factor to establish a prospective rate. The insurance company develops a trend of the client's past claims (losses) and divides the factor by an exposure base in order to determine a ratio between the exposure and loss exposure which is called the prospective rate.