White Paper

Transitioning from Fixed Cost to Loss Sensitive: Retrospective Rating Plans are a Great Option

Retrospective (Retro) rating insurance plans can have many advantages for employers. Read on to learn more about this hybrid risk financing plan to determine if it meets your organization’s needs.

White Paper Summary

Retrospective (Retro) rating insurance plans can have many advantages for employers. They are a hybrid risk financing plan in which an organization buys insurance subject to a rating formula that adjusts the premium after the end of the policy period based on the insured organization’s actual losses during the policy period. Employers should consider state eligibility requirements, premium size and risk tolerance when contemplating the move to a retro. The majority of states require $100,000 in countrywide premium to be eligible for a “statutory” retro program. However, some states do offer a Large Risk Loss Rating Option (LRARO) which allows the insurer the flexibility to negotiate the retro terms to find a solution that fits the insured’s budget and risk tolerance. Below we will identify the components that make up a retro rating plan as well as the benefits of having this type of plan.


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The General Insurance Group is the largest business segment within the Old Republic Insurance Group and specializes in the property & casualty marketplace. Each company focuses on a select segment, offering specialized insurance coverages or specializing by industries. This is our competitive advantage. While collectively we offer a full suite of risk management and insurance solutions, our expertise in unique industry segments is unsurpassed. We serve large corporations with complex risks, small and mid-sized companies, and consumers with home and auto warranty offerings.

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The R&I Editorial Team can be reached at [email protected]