Schedule rating

Category: Pricing & rating · Reviewed by Chrissie Anderson, Client Executive · Last reviewed

Schedule rating

Schedule rating is the underwriter’s adjustment to a manual or experience-rated premium for individual risk characteristics not captured by the rating algorithm. It is the “judgemental” layer of commercial pricing.

Typical scheduling factors

Factor	Credit/debit range
Quality of management	±10%
Building construction superior to grade	±5%
Sprinkler-protected throughout	±10%
Loss prevention programme	±5%
Premises condition	±5%
Security (intruder alarm, CCTV, guarding)	±5%
Employee training programme	±5%
Business continuity plan	±3%

Total scheduling adjustments are usually capped at ±25% to ±40% depending on insurer policy.

Governance

Schedule rating is an obvious source of inconsistency and potential conduct risk (e.g. discrimination, loyalty penalty). PRA and FCA expect insurers to monitor schedule rating outcomes and evidence consistent application. Detailed peer review of large schedule rating credits is now common.

Schedule rating in personal lines

In the UK, personal lines schedule rating in the discretionary sense has largely disappeared, replaced by GLM-based pricing factors. The FCA’s pricing rules (PS21/5) preclude discretionary discount strategies that would have been classic schedule rating in earlier years.

References

• IFoA. Pricing guides.
• FCA PS21/5.

Cross-references

• Manual rating
• Experience rating

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Maintained by Matt Bartlett, Director, Apex Insurance Brokers Limited. FCA FRN 724952. Companies House 07014570.