What is rating model in SAP (FS-PMA - SAP Policy Management Add-On for Auto Insurance)?

SAP Term: rating model

• Component: FS-PMA

• Component Name: SAP Policy Management Add-On for Auto Insurance

• Description: This model defines how the rating of a premium level will change based on the number of claims or losses with a negative impact. It defines the premium levels in case of upgrades for claim- free periods or downgrades if claims were submitted during the period.

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• Key Concepts: 
  A rating model is a tool used in the FS-PMA SAP Policy Management Add-On for Auto Insurance to calculate the premium for a policy. It is based on a set of criteria, such as the driver's age, driving record, and type of vehicle. The rating model takes these criteria into account and assigns a risk score to each policyholder. This score is then used to determine the premium for the policy. 
  
  How to use it: 
  The rating model can be used to calculate the premium for a policy by entering the relevant criteria into the system. The system will then generate a risk score for each policyholder and use this score to determine the premium for the policy. 
  
  Tips & Tricks: 
  It is important to ensure that all relevant criteria are entered into the system when using the rating model. This will ensure that the risk score is accurate and that the correct premium is calculated. Additionally, it is important to review the rating model periodically to ensure that it is up-to-date and accurately reflects current market conditions. 
  
  Related Information: 
  The rating model is just one component of the FS-PMA SAP Policy Management Add-On for Auto Insurance. Other components include policy administration, claims processing, and customer service. Additionally, there are other tools available that can be used in conjunction with the rating model, such as predictive analytics and machine learning algorithms.