Experience rating
Pricing a plan on its own claims history.
Experience rating sets your premium using the claims your own employees actually generated over a defined experience period, rather than pricing you on the insurer's book of business generally.
The larger the group, the more heavily its own experience is weighted. This is applied through a credibility factor, so most plans are priced on a blend of their own experience and pooled data.
What this means for a BC plan
Below roughly fifty lives, most BC groups are rated substantially on pooled data. That limits how much 'improving claims experience' can move a renewal at the small end — plan design and marketing the group tend to be the more productive levers.
Related terms
Where this comes up
Why renewals increase · All glossary terms · Ask an advisor directly
General information only, not advice for your specific plan. See our legal and licensing disclosures.