What is the Definition of Rating Bureau?
The insurance business is based on the spread of risk. The more widely risk is spread, the more accurately loss can be estimated. An insurance company can more accurately estimate the probability of loss on 100,000 homes than on ten. Years ago, insurers were required to use standardized forms and rates developed by rating agencies. Today, large insurers use their own statistical loss data to develop rates. But small insurers, or insurers focusing on special lines of business, with insufficiently broad loss data to make them actuarially reliable depend on pooled industry data collected by such organizations as ISO, which provides information to help develop rates such as estimates of future losses and loss adjustment expenses like legal defense costs.
Source: Insurance Handbook A guide to insurance: what it does and how it works | https://www.iii.org/
Label: Insurance
Theme: Dictionary of Insurance Terms
Other Questions: What is the definition of Annuity?
What is the Definition of Rating Bureau?
You can find random definition and meaning of insurance terms below:
What is the meaning of Credit based insurance score
A number representing the likelihood of loss, assigned to insurance applicants, based on credit history. Like most insurers, Nationwide uses a credit-based insurance score to predict insurance losses. Studies show that considering a person’s credit behavior can help in predicting potential losses more accurately. By taking this into account, Nationwide can provide a more appropriate rate for each customer. About half of our existing customers receive a rate decrease based on their good credit scores.
What is the meaning of Credit card, forgery and counterfeit money coverage
Coverage that pays for the legal obligation of an insured to pay because of theft or unauthorized use of credit cards (including Electronic Funds Transfer cards) issued to or registered in an insured's name. This coverage also applies to forged checks and counterfeit money, but does not provide identity theft coverage.
What is the meaning of Customization
Any after-market add-ons or accessories installed on a vehicle, such as chrome rims, ground effects body kits and off-road lights. (Customization does not include engine performance accessories or modifications.)
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