A totally bogus and inane report! There isn’t a company I know of in NJ who lets any premium “leak”. There is no way to measure this component and the figures are totally conjecture!
If I am reading this right, this would be an average of $1,142 per policy. LOT OF LEAKAGE. The premium per policy is probably pretty accurate; it’s the underwriting/investigation of the true risk that is at issue. If the true risk was on the application chances are the client would not purchase the coverage and therefore the policy would not be included in these numbers.
I’m not sure if this is Bogus or plain BS. Just another lame excuse to pass their “loss” in revenue on to customers. We’ve all suffered losses in revenue, who do small businesses pass that on to?? Suck it up and buy your own Immodium for your own “leaks”…..
Nothing really to “pass on”… the shrinkage is already built into policies. The story says that exposure is down this year so, if anything, companies could feel compelled to lower rates – of course, considering how much many companies have lost writing off losses from bad investments I doubt we’ll see premium decreases on a major scale.
But… since you asked… who do small businesses pass lost revenue to? They pass it to consumers the same as big businesses – at least if they want to stay in business. Costs associated with every theft, fraud, shrinkage, write-off, etc from every business no matter the size transfers that loss to the consumer by building the expense into the cost of the goods or services they provide.
Come on when you get a quote over the internet does anyone really tell the company how many miles you drive. It’s kinda like putting your weight on our drivers license..LOL We all fudge….
Report is developed by an ISO company…the mother ship of all insurance information. Guess what? There are other ISO companies that have $olutions to close the leakage gap. If you are concerned, I$O will help you with your problem.
If you truly need help, ISO has a lot of product and it works. However, this article is just part of a marketing strategy.
To my knowledge there are several other companies that work to solve this issue of premium leakage for insurance companies.
I must admit…I am not sure of the correctness of these numbers however no one can truly refute that premium leakage does exist. Finding a solution to that issue can help tremendously not only by adding additional premium revenue but also by helping a company avoid overall rate increases (the very definition of insurance…spreading the risk proportionally among members of a group – insureds).
Premium leakage – or poor underwriting? the call is a difficult one to make, however the personal auto lines are but the tip of the problem. To see how much premium shortfall there is, audit an commercial auto carrier and look at the problems they are facing.
OTR Drivers are putting in more miles, the monthly reports to the carriers are not accurately reflecting the exposure, in most cases – some are very accurate. Tie those accounts to a reporting form on miles or revenue, and see how many Comm Auto Underwriters can accurately asses the rate based upon unverified information?
The bucks involved in losses in this market sector are a whole lot larger than personal auto, and premium is shrinking.
God forbid that you would accuse underwriters of underpricing, over crediting and misclassifying accounts. Never happens. I find that many of the newer commercial underwriters are paper shufflers, not actual underwriters. I think that’s true at many, if not all companies. They don’t understand the coverages, exposures or pricing methods for commerical underwriting. We don’t train that well any more. Hire them and put them into production.
You know why they call it a “melt down”? It’s because it starts at the top, corner office, and works its way down to the mail room.
If the President didn’t approve of under-pricing the business to be “competitive”, then they would be in this mess, and AIG wouldn’t need my, and your, $ 125 Billion to stay afloat.
A totally bogus and inane report! There isn’t a company I know of in NJ who lets any premium “leak”. There is no way to measure this component and the figures are totally conjecture!
If I am reading this right, this would be an average of $1,142 per policy. LOT OF LEAKAGE. The premium per policy is probably pretty accurate; it’s the underwriting/investigation of the true risk that is at issue. If the true risk was on the application chances are the client would not purchase the coverage and therefore the policy would not be included in these numbers.
I’m not sure if this is Bogus or plain BS. Just another lame excuse to pass their “loss” in revenue on to customers. We’ve all suffered losses in revenue, who do small businesses pass that on to?? Suck it up and buy your own Immodium for your own “leaks”…..
Nothing really to “pass on”… the shrinkage is already built into policies. The story says that exposure is down this year so, if anything, companies could feel compelled to lower rates – of course, considering how much many companies have lost writing off losses from bad investments I doubt we’ll see premium decreases on a major scale.
But… since you asked… who do small businesses pass lost revenue to? They pass it to consumers the same as big businesses – at least if they want to stay in business. Costs associated with every theft, fraud, shrinkage, write-off, etc from every business no matter the size transfers that loss to the consumer by building the expense into the cost of the goods or services they provide.
Come on when you get a quote over the internet does anyone really tell the company how many miles you drive. It’s kinda like putting your weight on our drivers license..LOL We all fudge….
Report is developed by an ISO company…the mother ship of all insurance information. Guess what? There are other ISO companies that have $olutions to close the leakage gap. If you are concerned, I$O will help you with your problem.
If you truly need help, ISO has a lot of product and it works. However, this article is just part of a marketing strategy.
To my knowledge there are several other companies that work to solve this issue of premium leakage for insurance companies.
I must admit…I am not sure of the correctness of these numbers however no one can truly refute that premium leakage does exist. Finding a solution to that issue can help tremendously not only by adding additional premium revenue but also by helping a company avoid overall rate increases (the very definition of insurance…spreading the risk proportionally among members of a group – insureds).
Premium surpression by insurance departments in various states is worse than premium leakage. I wonder what the cost is on that problem.
Premium leakage – or poor underwriting? the call is a difficult one to make, however the personal auto lines are but the tip of the problem. To see how much premium shortfall there is, audit an commercial auto carrier and look at the problems they are facing.
OTR Drivers are putting in more miles, the monthly reports to the carriers are not accurately reflecting the exposure, in most cases – some are very accurate. Tie those accounts to a reporting form on miles or revenue, and see how many Comm Auto Underwriters can accurately asses the rate based upon unverified information?
The bucks involved in losses in this market sector are a whole lot larger than personal auto, and premium is shrinking.
God forbid that you would accuse underwriters of underpricing, over crediting and misclassifying accounts. Never happens. I find that many of the newer commercial underwriters are paper shufflers, not actual underwriters. I think that’s true at many, if not all companies. They don’t understand the coverages, exposures or pricing methods for commerical underwriting. We don’t train that well any more. Hire them and put them into production.
You know why they call it a “melt down”? It’s because it starts at the top, corner office, and works its way down to the mail room.
If the President didn’t approve of under-pricing the business to be “competitive”, then they would be in this mess, and AIG wouldn’t need my, and your, $ 125 Billion to stay afloat.
Of, FYI – no accusation when you can prove it.