For upcoming changes to the Business Recognition program, visit the Business recognition page.
Your loss ratio is based on your claims history for the previous 5 calendar years. It's calculated by dividing the amount we've paid out in claims where your business was at fault in the last 5 years, by the amount you've paid in premiums in the last 5 years.
In March, you'll receive a notice of your assessment by mail, indicating your base insurance premium for that year, as well as your discount or surcharge, if applicable. The assessment applies to vehicles renewed on or after May 1 of that year. It remains in place until the following May 1, by which time an updated assessment will be available.
Your loss ratio determines whether you receive a discount or pay a surcharge on your vehicle insurance. The following examples are based on the new BR scale effective May 1, 2017:
- If your loss ratio for the past 5 years is 60% or less, you're eligible for a discount, to a maximum of 15%.
Example: In the last 5 years, SGI has paid $1,000 in claims where your company was held responsible and you've paid $4,000 in premiums to SGI. Divide $1,000 by $4,000 to determine your loss ratio of 25%. You qualify for a 12% discount.
- If your loss ratio for the past 5 years is greater than 70%, you're subject to a surcharge, to a maximum of 25%.
Example: In the last 5 years, SGI has paid $3,500 in claims where your company was held responsible and you've paid $4,000 in premiums to SGI. Divide $3,500 by $4,000 to determine your loss ratio of 87.5%. You're subject to a 8% surcharge.
- If your loss ratio for the past 5 years is between 61 - 70%, you'll receive neither a discount nor a surcharge and will pay the base insurance premium.
Relative to the amount of premium you pay, losses are capped to ensure assessments are fair and reasonable. The capped loss ratio is used to determine how much you save or pay on your vehicle insurance. This cap may not apply to International Registration Plan (IRP) businesses.
Each month, loss ratios are analyzed and businesses that experience significant changes in their loss ratio may be contacted. If your loss ratio worsens, we may adjust your assessment immediately to reflect your deteriorating claims experience.