Rating in Guidewire

What is Rating in Guidewire?

Rating in Guidewire PolicyCenter signifies the procedure of figuring insurance premiums. This process relies on a broad spectrum of elements such as chosen coverage, risk traits, underwriting standards, and regional stipulations. The Guidewire Rating Engine supplies a very flexible and adjustable framework that lets insurers establish and manage their rating logic for both individual, commercial, and specialized business sectors.
Key Components of Guidewire Rating

Rating Engine

A built-in, high-performance engine that computes premiums when quoting, binding, making endorsements, renewals, and cancellations.

Rate Books

Configured layouts defining rate calculations. Each rate book encompasses rate tables, variables, modifiers, and formulas specific to a business line and jurisdiction.

Rating Worksheets

Visual tools used for troubleshooting and comprehension of premium computations. Worksheets showcase every phase of the rating computation, comprising intermediate values and table lookups.

Rating Parameters and Inputs

The rating operation employs policy data, risk details, typelists, and external data sources to determine applicable rates.

Versioning and Effective Dating

Supports rate books with version control and effective dating, assisting insurers in applying differing rating logic over time whilst maintaining compliance and auditability.

How Rating Works in PolicyCenter
User inputs quote or policy information

– Details about the insured, vehicle or property characteristics, coverage options, and risk factors are captured.

Rating engine evaluates applicable rate books

– The system retrieves values from rate tables, applying modifiers, discounts, and surcharges.

Premium is computed in real-time

– A detailed breakdown of base premium, fees, taxes, and adjustments is relayed to the user or agent.

Worksheets provide clarity

– Users and underwriters can view step-by-step computations to confirm correctness and compliance.

Benefits of Guidewire Rating
Business User Configurability

Empowers product owners and actuarial teams to amend rates and logic without complex coding, employing Guidewire Studio or Rating Management tools.

Accelerated Time-to-Market

New rates and rating structures can be set up, assessed, and implemented swiftly, accommodating regulatory and market necessities.

Precision and Compliance

The system guarantees uniform and auditable rating logic across all transactions and policy adjustments.

Support for Complex Products

Manages layered coverage setups, multi-state policies, risk modifiers, and sector-specific regulations.

Integration with External Data

Integrates data from external resources (e.g., credit scores, loss histories, location-based risk scores) to refine rating judgments.

Why Rating is Vital in P&C Insurance

Accurate, adaptable rating is the foundational element of profitable underwriting. With Guidewire’s Rating Engine, insurers can uphold pricing accuracy, ensure regulatory compliance, and adapt quickly to evolving market scenarios—whether launching a new auto product or updating a commercial lines portfolio.
Common Use Cases

Configuring personal auto rating with location-specific modifiers
Handling tiered commercial property rates based on building characteristics
Applying discounts for bundled policies (multi-line)
Enforcing regulatory surcharge regulations by state
Calculating endorsements and pro-rata premium adjustments