What method do most insurers use to determine premiums for large groups?

Most insurers utilize experience rating to determine premiums for large groups. This method assesses the specific claims history of a group, which provides insight into the group's risk level and overall health. In experience rating, the insurer reviews past medical claims, costs incurred, and the group's demographics to establish a premium that reflects the actual expected costs.

The experience rating method is particularly effective for large groups as it allows insurers to tailor premiums based on individual group experiences rather than applying the same rate across all groups. This results in a fairer premium structure, rewarding groups with lower claims with reduced costs, while higher-risk groups may pay more based on their claims history.

In contrast, community rating would apply the same premium rate to all members of a community, regardless of their individual health status or risk, which does not accurately reflect the claims history for larger, more diverse groups. Pooled risk analysis generally provides a broad overview and statistical insights but doesn't directly influence premium setting like experience rating does. Standard underwriting typically applies to individual policies rather than large groups, making experience rating the preferred approach for premium determination in large group insurance.