• We are pleased to announce that the winner of our Feedback Prize Draw for the Winter 2024-25 session and winning £150 of gift vouchers is Zhao Liang Tay. Congratulations to Zhao Liang. If you fancy winning £150 worth of gift vouchers (from a major UK store) for the Summer 2025 exam sitting for just a few minutes of your time throughout the session, please see our website at https://www.acted.co.uk/further-info.html?pat=feedback#feedback-prize for more information on how you can make sure your name is included in the draw at the end of the session.
  • Please be advised that the SP1, SP5 and SP7 X1 deadline is the 14th July and not the 17th June as first stated. Please accept out apologies for any confusion caused.

Risk factor, rating factor and exposure measure

G

Gabriella Knipe

Member
Hi

I need help understanding the difference between a risk factor, a rating factor and an exposure measure.

Kind regards
 
Hi Gabriella,

Risk factors and rating factors are similar. A risk factor is something that is expected to have an influence on the intensity of risk, in an insurance contract. For my motor insurance, this could be something like how dangerously I drive, or if I speed a lot.

A rating factor is something that is used to come up with a premium for the policy. Now, when it comes to my car insurance, I can't objectively state how much of a dangerous driver I am, or how much I speed. So, rating factors are used as a proxy. Rating factors could be age, number of years licence held, if I have children etc.

Exposure measure is the basic unit used by insurers to measure the amount of risk insured. For example, in fleet motor, the exposure measure may be number of cars in the fleet, or the value of the vehicles in the fleet.

I hope this helps.

Thanks
Aman
ActEd Tutor
 
Back
Top