What is the term for establishing a premium based on the underwriter's evaluation of an individual risk?

Judgement rating refers to the process of determining insurance premiums based on the underwriter's individual evaluation of a specific risk. This method is particularly useful for unique or unusual risks that may not fit neatly into standard classification systems. In judgement rating, the underwriter assesses various factors such as the insured's history, property conditions, and potential exposure to losses, which ultimately informs the premium amount.

This approach contrasts with more standardized methods that apply broad categorizations to assess risk. For instance, risk assessment typically encompasses a broader review of overall risks without leading to a premium determination. Premium calculation focuses on the mechanics of how to derive the premium once risks have been assessed or classified, while loss evaluation pertains more to estimating potential losses rather than determining premiums directly. The specificity and nuance of judgement rating make it the preferred method in scenarios where risks cannot easily be quantified using standard parameters.