Which process involves determining the pricing of insurance policies?

The process that involves determining the pricing of insurance policies is known as rate making. This is a critical aspect of the insurance industry, where actuaries and underwriters assess risk factors, historical data, and various market factors to establish a price that is both competitive and profitable for the insurance company.

Rate making encompasses evaluating numerous variables such as the probability of claims occurring, the costs associated with those claims, and overall market conditions. The ultimate goal is to set rates that adequately cover potential risks while also reflecting the value offered to policyholders.

In contrast, claims processing focuses on the handling of claims once they are filed by policyholders, renewal management deals with re-evaluating existing policies as they come up for renewal, and underwriting is the overall assessment and evaluation of risk to decide whether to approve an application for insurance and under what terms. While underwriting is related to rate making, it does not directly involve the pricing process itself.