Which rating is assigned to new companies in group insurance?

In group insurance, new companies typically receive a manual rating. This rating system is based on predetermined tables and guidelines provided by the insurance provider. Manual rating is used for entities that do not have enough historical claims data or experience to determine their risk profile accurately. Since new companies lack a track record, the manual rating assists underwriters in assessing the initial level of risk associated with insuring the group, taking into account industry averages and similar groups.

The manual rating helps establish premium amounts that are reflective of collective risk factors rather than individualized claims history. As the company matures and develops its own claims data, it may then transition to an experienced rating, which considers the company's actual experience and loss history.