That’s too bad. As an agent, I can see how this practice would be useful. That section of my book that is price sensitive takes up most of our time re-shopping coverage. This as a deterrent would be a useful tool. If certain other behaviors have an effect on rates, why not charge more for excessive shoppers?
Charging profitable risks more solely because they are less price-discriminatory and have higher retention in order to subsidize a lesser performing segment of a book is flat-out wrong. It’s robbing Peter to pay for Paul.
Any producer that supports price optimization is not looking out for his clients’ best interests. I am a big fan of smaller government, but when companies engage in predatory behavior like price optimization, it only serves to further justify the need for prior-approval rate regulation.
Paul, is the glass half empty or half full. IMHO the companies are not charging the “shoppers” higher rates. They are increasing the premiums of clients that don’t shop every year. They look at loyal customers and keep raising their rates as much as they possibly can before they force that customer to go elsewhere. It’s not much different than zip code pricing where retailers charge different prices depending on where you live.
Correct JoeB. Actually, the frequent shoppers are getting better rates and the company screws over the loyal long term, claim free, good paying customers in their quest for more premium. Isn’t this practice backwards from good underwriting? The actuaries are to blame for this and companies are just hoping the loyal non shopping customers will just take the increase and go on. I think they are finding out that they are losing more than winning with this strategy.
That’s too bad. As an agent, I can see how this practice would be useful. That section of my book that is price sensitive takes up most of our time re-shopping coverage. This as a deterrent would be a useful tool. If certain other behaviors have an effect on rates, why not charge more for excessive shoppers?
Charging profitable risks more solely because they are less price-discriminatory and have higher retention in order to subsidize a lesser performing segment of a book is flat-out wrong. It’s robbing Peter to pay for Paul.
Any producer that supports price optimization is not looking out for his clients’ best interests. I am a big fan of smaller government, but when companies engage in predatory behavior like price optimization, it only serves to further justify the need for prior-approval rate regulation.
You’ve got it backwards. The prices are lower for the price-sensitive group. They’re rewarding them for taking up more of your time.
People who stick around get a price increase.
Paul, is the glass half empty or half full. IMHO the companies are not charging the “shoppers” higher rates. They are increasing the premiums of clients that don’t shop every year. They look at loyal customers and keep raising their rates as much as they possibly can before they force that customer to go elsewhere. It’s not much different than zip code pricing where retailers charge different prices depending on where you live.
Correct JoeB. Actually, the frequent shoppers are getting better rates and the company screws over the loyal long term, claim free, good paying customers in their quest for more premium. Isn’t this practice backwards from good underwriting? The actuaries are to blame for this and companies are just hoping the loyal non shopping customers will just take the increase and go on. I think they are finding out that they are losing more than winning with this strategy.
So far, mostly blue states have banned this poor, free-market based practice. We need more red states to follow suit.