Experience Rating for Binders

Hi

In April 2019 the examiners report mentions that travel insurance binders are mostly experience rated.

'Travel – mostly experience for binders, mostly exposure for direct, based on data availability'

Within a hypotethical travel insurance binder, are the risks not exposure rated? In this sense, it the fact that the risk is in the binder not a rating factor in an overall exposure based approach, in that the insurer will use its exposure model and modify it by assuming all the risks are coming from the binder in question?

Example: person is part of an affinity group which purchases travel insurance from an MGA as part of a binding authority. The MGA has full authority to change rates within a given rating matrix supplied by the insurer, by certain rating factors. The persons insurance price is determined by reference to these rating factors in an exposure based method. This matrix will differ from the insurers overall rating approach, having taken into account that all the individual risks are coming from the binder in question.

I don't quite understand how travel insurance could be explained as experience rated even through a binder, unless it uses a flat fee approach for each individual for a large scheme. Could anyone explain?

 

ok thank you katherine, I should have checked