Inputs
Example Data Table
| Scenario | Base Premium | Safety Score | Incidents | Claims Cost | Training % | Audit % | Risk | Est. Discount |
|---|---|---|---|---|---|---|---|---|
| Steady improvement | USD 2,500 | 82 | 1 | 500 | 70 | 75 | Medium | ~15% |
| Excellent safety year | USD 4,800 | 95 | 0 | 0 | 92 | 90 | Low | ~34% |
| High-risk operations | USD 6,200 | 88 | 3 | 2,400 | 80 | 78 | High | ~8% |
Example values are illustrative and not underwriting advice.
Formula Used
1) Safety score component
score_component = (safety_score / 100) × max_score_discount
2) Bonuses
training_bonus = (training_completion / 100) × training_bonus_max
audit_bonus = (audit_score / 100) × audit_bonus_max
telematics_bonus = (telematics_score / 100) × telematics_bonus_max (if enabled)
clean_year_bonus = min(years_clean × clean_year_bonus_per, clean_year_bonus_cap)
3) Penalties
incident_penalty = incident_count × incident_penalty_per
claims_penalty = min((claims_cost / base_premium) × 10, claims_penalty_cap)
4) Final discount with risk adjustment and caps
preliminary_discount = score_component + bonuses − penalties
final_discount = clamp(preliminary_discount × risk_factor, 0, final_discount_cap)
final_premium = base_premium × (1 − final_discount/100)
This calculator provides planning estimates. Actual discounts vary by carrier rules, jurisdiction, and verified loss runs.
How to Use This Calculator
- Enter your Base Premium and select a currency.
- Set your Safety Score, incidents, and claim cost totals.
- Add supporting indicators: training completion and audit score.
- Enable monitoring only if you track driver or equipment metrics.
- Adjust advanced controls to match your internal policy assumptions.
- Click Calculate, then export CSV or PDF if needed.
Discount Drivers and Data Inputs
Use this calculator to estimate premium savings from measurable safety performance. Inputs include base premium, safety score, incident count, claim cost, and years without incidents. Operational indicators such as training completion, audit score, and monitoring score refine the estimate. Advanced controls set realistic caps for score-driven discounts, bonuses, and total discount limits.
Interpreting Safety Score and Caps
The safety score converts to a score component using a maximum score discount percentage. For example, an 88 score with a 25% cap contributes 22.0 percentage points before risk adjustment. If your program targets a carrier maximum of 15%, reduce the cap to match. Consistent scoring methods matter: keep the same rubric across renewals for comparable trend lines.
Incident and Claims Penalty Modeling
Incidents reduce discount potential through an incident penalty per event. If the penalty is 3% and you record two incidents, the model subtracts 6 percentage points. Claims add a second penalty scaled by claim cost relative to premium. A claim cost equal to the base premium produces a 10% penalty before the claims cap. Use verified loss runs to keep ratios credible.
Risk Adjustment and Premium Planning
Industry risk level applies a factor to the preliminary discount to reflect underwriting appetite. Low risk uses 1.00, medium uses 0.85, and high uses 0.70. This prevents overestimating savings in higher-hazard classes. The adjusted premium equals base premium minus the discount amount. Compare scenarios by changing risk level, caps, or program inputs to see planning ranges.
Reporting, Governance, and Sensitivity Testing
Treat results as a decision-support estimate, not a quoted rate. Document assumptions for each renewal cycle, including time windows and definitions for incidents and claim costs. Use the component impact chart to communicate which actions improve outcomes fastest. Run sensitivity tests by varying caps and penalties to create best, expected, and conservative budgets. Pair outputs with monthly leading indicators, and review changes after major operational expansions or rapid staffing shifts.
FAQs
What does the safety discount represent?
It is an estimated percentage reduction applied to your base premium based on safety performance indicators, minus incident and claims penalties, then adjusted by an industry risk factor and capped by your chosen limits.
How should I choose the industry risk level?
Select the level that matches your class of operations. Lower-risk activities typically sustain higher discounts. Higher-risk categories may have tighter underwriting limits, so the calculator applies a lower factor to the preliminary discount.
Why does the calculator penalize claim cost relative to premium?
Underwriters often consider loss ratios. Scaling claim cost by premium normalizes results across different program sizes. The claims penalty cap prevents a single large period from overwhelming the estimate when you need a planning range.
When should I change the advanced caps and penalty rates?
Adjust them to mirror carrier guidelines, broker feedback, or internal policy targets. If your market rarely offers more than 20% discount, lower the final cap. If incidents are weighted heavily, increase the incident penalty per event.
How do training and audits affect the discount?
Training completion and audit scores add bonus percentage points, scaled to their maximum bonus settings. Use consistent completion tracking and audit methodology so improvements reflect real operational change rather than measurement noise.
Can I use this for budgeting and renewal discussions?
Yes, for scenario planning. Save multiple runs with different assumptions, export CSV for documentation, and share the PDF summary. Always validate inputs against verified records and treat the output as an estimate, not a binding quote.