Houshold Entire Composite Percentages for Rates P&C ?

[dizzy]

Anyone dealing with Composite rating factors rating ? New shift in underwriting has made it difficult to explain to clients ?
Entire household is rated besides the normal stuff add in credit, it's new and improved. The communication is poor at best, the field is told tell the client is composite rating factors, so anyone know what that actually means ? One person said it was like family history, on life insurance, 3 generation back, regardless that occupation was a coal miner and all the male died before their 50th birthday, we going to rate for that risk, and the grandson is a manager in fancy hotel he gets dinged ?

It more along the lines of adding a kid as a driver and the old car, all cars go up on the policy ? Even though they are rated exactly how they should be, all cars see a rate adjustment sometimes as much as $200 (up) per car(all cars). so has anyone experienced this type of thing, it really hard to explain to customers ?
Any suggestion ?
We told the entire industry is going in this direction ?
Has anyone else seen this ?

We no longer look at the car and the driver but the entire account ( all drivers and cars, with 4,000 moving parts for a rate) unfortunately clients only see rates right now , on the positive side often times we see only a $1 difference between 25,000 pd and 50,000 pd and a $5 to 100,0000 which makes no sense to triple coverage for $ 1 a month ?

 

[djs]

Re: Houshold Entire Compoiste Percentages for Rates P&C ?

Composite rating has been around for a while and its why offline rating systems are a dying breed.

There is no understanding how it works or explaining it to the client. Its simply a way for a carrier to pick and choose what type of clients they want based on whatever factors they want. It also usually gives carriers a way to change rates without filing with the DOI by simply changing the makeup of the composition, within what is already DOI approved.

At the end of the day, if the rate goes crazy, you switch carriers and take care of the client. No real need to explain why or what happened, just have them sign for the change and toot your own horn a bit with the client for being able to take care of their needs.

Dan

 

[AgentProvocateur]

Anyone dealing with Composite rating factors rating ? New shift in underwriting has made it difficult to explain to clients ?
Entire household is rated besides the normal stuff add in credit, it's new and improved. The communication is poor at best, the field is told tell the client is composite rating factors, so anyone know what that actually means ? One person said it was like family history, on life insurance, 3 generation back, regardless that occupation was a coal miner and all the male died before their 50th birthday, we going to rate for that risk, and the grandson is a manager in fancy hotel he gets dinged ?

It more along the lines of adding a kid as a driver and the old car, all cars go up on the policy ? Even though they are rated exactly how they should be, all cars see a rate adjustment sometimes as much as $200 (up) per car(all cars). so has anyone experienced this type of thing, it really hard to explain to customers ?
Any suggestion ?
We told the entire industry is going in this direction ?
Has anyone else seen this ?

We no longer look at the car and the driver but the entire account ( all drivers and cars, with 4,000 moving parts for a rate) unfortunately clients only see rates right now , on the positive side often times we see only a $1 difference between 25,000 pd and 50,000 pd and a $5 to 100,0000 which makes no sense to triple coverage for $ 1 a month ?

Nationwide insurance had adopted composite rating in some Western states about a decade ago, before they changed over to the re-branded Allied, as Nationwide Insurance Company of America. I don't know if they kept the blended rating model.

It has the most influence when adding a young driver, because instead of putting the yd on an old vehicle without comprehensive & collision to get the lowest rate, the yd increases the rates of the other vehicles on the policy as well.

I'd explain it was because the yd is covered, if he/she drives any of the cars on the policy, so the rates are adjusted on all the cars to account for the increased risk.

Only the credit of the policyholder & spouse should be used for rating, in states that allow it, so it's only factors like age, sex, marital status, & driving record of other drivers, that is used in the composite rating.

I'm not sure if it's where the industry is heading. Which companies are using it now?

 

[Bertolinoins]

Companies tweek their pricing to attract the type of clients they want. I don't know or care how it works on the back end. If you are seeing much higher rates on low limit accounts and it costs very little to buy higher limits, they are not targeting low limit, Liab only accounts. Rate them with all of your carriers and present the best option because there is not an explaination they will happy with.