Do premiums reflect the individual circumstances of each Fund Member or are they community rated to the aggregate risk profile of the whole pool?
Primarily, premiums reflect the circumstances and claims history of each Fund Member. Fund Member premiums are set, where possible, on the past experience of the Fund Member and an assessment of the current level of risk (taking into account the Fund Member’s actions to improve its risk exposure). However, a key benefit of a fund is that there is some balance made to allow consistency in premiums and spread short-term costs, which helps to alleviate the pressure experienced with exceptional, one-off large losses.
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