What are changes in premium rates based on risk factors referred to as?

Changes in premium rates based on risk factors are known as rate adjustment. This term encompasses the systematic process where an insurer evaluates the risk associated with a policyholder and modifies the premium accordingly. Various risk factors can influence these adjustments, such as the individual's health, lifestyle choices, occupation, and even demographic factors.

Rate adjustments ensure that the insurance premiums reflect the current understanding of risk, allowing insurers to remain financially viable while also offering reasonable rates based on individual risk profiles. This mechanism is essential for maintaining the balance between providing coverage and protecting the insurer's interests.

In contrast, terms like "rate cuts" typically imply a reduction in premiums without necessarily taking risk into account, while "premium restructuring" often refers to broader changes in how premiums are organized, and "premium reassessment" may not specifically imply a change in rates linked to risk factors alone. Thus, rate adjustment is the most accurate term for reflecting changes in premium rates due to varying risk factors.