How Schedule Rating Drives Utilization, Outcomes, and Pricing Precision:
Schedule rating provides carriers with limited pricing flexibility by allowing adjustments to loss and/or expense components of premium when certain risk characteristics are not fully reflected in experience or base rates. In Pennsylvania, this flexibility operates within clearly defined statutory and regulatory constraints, including alignment with the PCRB’s Experience Rating Plan.
This report analyzes schedule rating outcomes under both the PCRB plan and independently filed carrier plans for Policy Years 2006–2021, examining utilization, credit and debit behavior, loss ratios, and policy size trends. The findings offer insight into how schedule rating is being applied in practice, how closely adjustments align with indicated results, and what the data suggests about pricing accuracy—particularly as recent Experience Rating Plan changes reshape eligibility and interaction between rating mechanisms.
24% vs. 1%
Actual schedule rating credits average approximately 24%, while indicated credits average about 1%.
What’s in the report
- Approximately 60% of eligible premium participates in schedule rating, reflecting its widespread use as a pricing tool among carriers.
- Actual schedule rating credits tend to be significantly higher than indicated levels, while debits more closely track actuarial indications—suggesting asymmetry in calibration.
- Loss ratios for schedule-rated policies are generally higher than for non-participants, driven in part by the magnitude of credits applied.