They all do it different ways.

They have the rates calculated by actuaries, and filed with each state home owners insurance commissioner.

As an example, one company (that I used to manually rate for, tells you how long ago that was, LOL), first you figure out how much coverage they need. You go to the tables for that amount (preferred at that time was $125,000 to $200,000, those were the lowest rates). Then you pick the construction type (frame, masonry veneer, masonry), then you pick the protection class code (ISO standard). Then you get the base rate. Then you add the premiums for any endorsements. You then apply credits and debits - for unupdated houses, or fully updated, for claims or no claims, for credit score, for deductibles, etc.

That gives you your final rate. It's a bit more complicated than that, as some endorsements get added before credits/debits, and some after.