Not every risk fits a statistical class. Judgment rating is the process of setting a premium based primarily on the underwriter’s experience, knowledge of the risk, and assessment of individual characteristics rather than on a published class rate.

Large commercial property, specialty liability, and unique manufacturing risks are often judgment-rated. The underwriter considers construction, protection, occupancy, management, loss history, and any other relevant factors, then arrives at a rate that reflects the perceived hazard. Actuarial indications and reinsurance costs still inform the decision.

Judgment rating allows flexibility but depends heavily on underwriter skill and consistency. Documentation of the reasoning supports later review and regulatory examination. Over time, sufficient data on similar risks may allow migration from pure judgment rating toward more structured rating plans.

• Premium setting based on underwriter judgment
• Used for unique or large individual risks
• Incorporates multiple qualitative factors
• Requires documentation and experienced underwriters