Category: Group risk fundamentals · Reviewed by Chrissie Anderson, Client Executive · Last reviewed 2026-06-10
Group risk pricing factors are the variables an insurer’s actuarial pricing model uses to set the unit rate applied to the scheme’s sum at risk or covered salary roll. The principal factors are scheme demographics (age and gender distribution), occupation mix, scheme size, location, free cover limit, benefit design and historical claims experience for the scheme or for the segment.
Category: Group risk fundamentals Also known as: Group risk rating factors Related concepts: Group risk underwriting limits, Free cover limit group risk, Active member
Pricing for group risk is normally expressed as a unit rate per £1,000 (for sums at risk on group life and group CI) or as a percentage of insured salary roll (for group IP). The unit rate is derived from a multi-factor model. Bigger schemes with longer credible claims histories are more heavily experience-rated; smaller schemes are predominantly book-rated against the insurer’s segment portfolio.
Pricing models are commercial and not directly regulated. However, the use of gender as a pricing factor for individual insurance is prohibited by Directive 2004/113/EC and the Test-Achats CJEU ruling (C-236/09) (since 21 December 2012). The CJEU ruling does not apply to occupational schemes for employees, so insurers can lawfully use gender mix at scheme level when pricing group risk benefits.
Pricing factors directly affect premium. A scheme with a younger workforce and a benign occupation mix may be priced 30–40% below an otherwise similar scheme with an older workforce in a heavy industrial occupation. Claims experience above 80% loss ratio over three years will typically attract a rating loading.
A 150-life professional services firm has an average age of 38, an even gender mix, an office-based occupation profile and no GIP claims over five years. The insurer prices GIP at 0.45% of salary roll. A construction firm of comparable size with average age 45 and a heavier-occupation mix is priced at 0.85% of salary roll for the same benefit.
This entry is part of the Apex Insurance Wiki. Last reviewed by Matt Bartlett on 2026-06-10. Next review: 2026-12-10.
Apex Insurance Brokers Limited. Authorised and regulated by the Financial Conduct Authority, FRN 724952. Registered in England and Wales, Companies House 07014570. This entry provides general information about UK insurance concepts and is not regulated advice. Consult your insurance broker on your specific position.
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