Rating methodology, key factors, product sub-class approaches and worked examples across the K-series PA&H portfolio.
Figures in this module are compiled from public reporting and market sources and are indicative for training; see the References page for the full confidence audit. EST
Base rates derived from morbidity tables (CMI data, insurer experience). All rates illustrative. ILLUS
Occupation class is typically the primary rating variable for PA (KA/KG). Standard Lloyd's occupation class definitions distinguish five or more categories:
| Class | Description | Examples | Rate Loading vs. Class 1 |
|---|---|---|---|
| Class 1 | Professional / managerial — desk-based | Solicitor, accountant, executive, teacher | Benchmark (×1.0) |
| Class 2 | Supervisory / light manual | Sales rep, shop manager, light factory supervisor | ×1.2–1.5 ILLUS |
| Class 3 | Skilled manual | Electrician, plumber, carpenter, nurse | ×1.5–2.0 ILLUS |
| Class 4 | Heavy manual / hazardous | Construction worker, miner, HGV driver, scaffolder | ×2.5–4.0 ILLUS |
| Class 5+ | Extra-hazardous / declined | Offshore oil worker, demolition, deep-sea fisherman | Individually rated or declined |
Age is the primary rating factor for medical expenses. Indicative rate indices relative to age 35 baseline.
| Age Band | Rate Index vs. Age 35 | Reason |
|---|---|---|
| 16–25 | 0.6–0.8× | Low morbidity; low claims utilisation |
| 26–35 | 1.0× (benchmark) | Moderate utilisation; baseline |
| 36–45 | 1.2–1.5× | Increasing diagnostic and specialist use |
| 46–55 | 1.8–2.5× | Cardiac, orthopaedic, cancer screenings increase |
| 56–65 | 3.0–4.5× | High utilisation; chronic condition management |
| 66–74 | 5.0–7.0× | Significant medical intervention frequency |
| 75+ | 8.0–12.0× | Major loading; often declined or limited benefit |
| Coverage Region | Age 18–35 | Age 36–55 | Age 56–70 | Age 70+ |
|---|---|---|---|---|
| Europe (Schengen area) | ~£18–25 p.a. | ~£30–50 p.a. | ~£70–120 p.a. | ~£150–400 p.a. |
| Worldwide (excl. USA/Canada) | ~£35–55 p.a. | ~£60–90 p.a. | ~£130–220 p.a. | ~£280–600 p.a. |
| Worldwide (incl. USA/Canada) | ~£55–90 p.a. | ~£100–160 p.a. | ~£220–380 p.a. | ~£400–900 p.a. |
Annual multi-trip policy, standard conditions, no pre-existing conditions declared. Online aggregator market rates. ILLUS
| Industry | Light manufacturing / assembly (SIC 2811) |
| Employees | 500; age profile 30–55 (average 41) |
| Benefit | AD&D: 3× annual salary; TTD: 52-week benefit; PTD: lump sum 5× salary |
| Average salary | £34,000 |
| Deferred period | 13 weeks (Employer SSP covers first 13 weeks) |
| Occupation class | Mix: 30% Class 1 (admin/management), 70% Class 3 (production floor) |
| Prior claims experience | 3 years: 2 minor injury claims; nil AD&D claims |
| Base PA rate (Class 3 average) | ~0.30% of covered benefit ILLUS |
| Occupation loading applied | ×1.4 (Class 3 weighting) ILLUS |
| Age factor | ×1.2 (average age 41) ILLUS |
| Experience discount | ×0.85 (favourable 3-year loss record) ILLUS |
| Total covered benefit | 500 × £34,000 × 5 (PTD multiple) = £85,000,000 |
| Indicative annual premium | ~£85m × 0.30% × 1.4 × 1.2 × 0.85 ≈ ~£363,000 p.a. ILLUS |
Illustrative only. Actual premium depends on syndicate appetite, benefit structure detail, reinsurance arrangements and market conditions at time of placement.
| Sport | Association football (Premier League) |
| Position | Central midfielder |
| Age at inception | 24 |
| Contract value | £5m per annum (3-year contract remaining) |
| Sum insured | £12m (projected career earnings to age 32) ILLUS |
| Trigger | Permanent total disablement: inability to play professional football as a result of accidental bodily injury |
| Medical history | One ACL reconstruction (right knee, 2022) — rated; ligament issues excluded for 2 years |
| Base rate (professional footballer, midfielder) | ~0.8–1.2% of sum insured p.a. ILLUS |
| Prior ACL loading | +0.30% p.a. with exclusion period ILLUS |
| Age discount | ×0.90 (age 24; peak physical condition) |
| Indicative annual premium | ~£12m × 1.1% × 0.90 ≈ ~£119,000 p.a. ILLUS |
Heavily illustrative. Sports disability rates in the Lloyd's market are individually negotiated based on sport, position, medical history and market appetite.
| Check | Priority | Notes |
|---|---|---|
| Occupation class confirmed and documented | CRITICAL | Misstated occupation is primary moral hazard vector |
| Disability definition: own-occ vs. any-occ vs. suited | CRITICAL | Defines effective coverage trigger; must match insured's expectation |
| Pre-existing conditions declared / IMU completed | CRITICAL | PEC non-disclosure is leading cause of PA claim disputes |
| Deferred period and benefit period confirmed | CRITICAL | Mismatched deferred period creates gap between SSP and IP benefit |
| Sports / hazardous leisure activities declared | IMPORTANT | Standard PA often excludes or limits: motorsport, contact sports, diving |
| Geographic territory and travel frequency | IMPORTANT | War zones, FCDO advised territories may trigger exclusions |
| Benefit calculation basis (salary multiple / fixed / agreed value) | IMPORTANT | Agreed value vs. loss of earnings basis has different claims implications |
| Group size / free cover limit applicability | IMPORTANT | Lives above free cover limit require individual medical evidence |
| Mental health coverage scope and limits confirmed | IMPORTANT | FCA Consumer Duty requires clarity on mental health coverage position |
| Claims experience: 3–5 year history obtained | USEFUL | Key for group scheme pricing; individual may have nil experience |
| Rehabilitation service integration | USEFUL | Early intervention reduces disability duration — confirms carrier service |
| IPID issued (retail products) | CRITICAL | FCA requirement for consumer-facing PA&H products (Consumer Duty) |