Mercury is correct that these drivers do have better experience and deserve better rates. Insureds who pay their bills do deserve a better rate and the right to shop around.
However, our small company would lose many of our current insureds who stay with us because of persistency. If this passes, Mercury will be able to compete with this group and take business from us. I will not vote for the proposition for purely selfish reasons.
Why does Mercury so badly want a way to surcharge people that have failed to maintain continuous insurance that they essentially bankrolled this whole initiative?
You’re right about Mercury’s market share being stagnant. They haven’t grown for at least five years.
I guess if they were able to offer a generous ‘portable’ persistency discount they could potentially eat into their competitors’ market share. Insureds that used to be uninterested might make the switch to Mercury if they could enjoy a significant premium savings.
I hate to go against the grain, but I’m not in CA so I’m used to the idea of a discount for continuous prior in our state. I totally buy into it too. I don’t have any data but in theory it makes sense that the group who always pays their bills on time are probably more responsible/careful (less claims). I would think that there would also be a lower percentage of insurance fraud in that same group. (would not have those who have an accident then quickly buy a policy to cover it). Our state also has an innocent no-prior so those who have not had a need for insurance in the last 6 months (i.e. did not own a car, military service over-seas, etc) would receive the full prior insurance discount. If Mercury or any other company can show data supporting that….what’s the big deal? Insurance is all about charging according to risk.
I too believe that there likely exists a correlation between previous coverage and claim frequency/severity. However, I do not believe this probable correlation to be Mercury’s sole motivation in financing this initiative. Ulterior motives are at work.
Small Company Guy, you’ve just proven the case that this is a pro-consumer initiative in spite of Harvey’s propaganda campaign. And Mercury’s motives are not ulterior: It wants the customers who would switch if they could take their persistency discount them, and it wants to give discounts to those who maintain continuous coverage because they are better risks than those who don’t. That’s what rating factors are supposed to do.
I dont see anything wrong with this discount. Those who pay their insurance consistently deserve every break they can get and other insurers will once again, offer the discount just like it was a few years ago. Although I dont represent Mercury, they have been a very big supporter of agents and brokers throughtout the west for years
I have mixed feelings about this proposal.
Mercury is correct that these drivers do have better experience and deserve better rates. Insureds who pay their bills do deserve a better rate and the right to shop around.
However, our small company would lose many of our current insureds who stay with us because of persistency. If this passes, Mercury will be able to compete with this group and take business from us. I will not vote for the proposition for purely selfish reasons.
Why does Mercury so badly want a way to surcharge people that have failed to maintain continuous insurance that they essentially bankrolled this whole initiative?
It’s because they aren’t growing in CA. Whereas if they can reduce rates to compete for a higher retention category of risks, they might be able to.
You’re right about Mercury’s market share being stagnant. They haven’t grown for at least five years.
I guess if they were able to offer a generous ‘portable’ persistency discount they could potentially eat into their competitors’ market share. Insureds that used to be uninterested might make the switch to Mercury if they could enjoy a significant premium savings.
I hate to go against the grain, but I’m not in CA so I’m used to the idea of a discount for continuous prior in our state. I totally buy into it too. I don’t have any data but in theory it makes sense that the group who always pays their bills on time are probably more responsible/careful (less claims). I would think that there would also be a lower percentage of insurance fraud in that same group. (would not have those who have an accident then quickly buy a policy to cover it). Our state also has an innocent no-prior so those who have not had a need for insurance in the last 6 months (i.e. did not own a car, military service over-seas, etc) would receive the full prior insurance discount. If Mercury or any other company can show data supporting that….what’s the big deal? Insurance is all about charging according to risk.
I too believe that there likely exists a correlation between previous coverage and claim frequency/severity. However, I do not believe this probable correlation to be Mercury’s sole motivation in financing this initiative. Ulterior motives are at work.
Small Company Guy, you’ve just proven the case that this is a pro-consumer initiative in spite of Harvey’s propaganda campaign. And Mercury’s motives are not ulterior: It wants the customers who would switch if they could take their persistency discount them, and it wants to give discounts to those who maintain continuous coverage because they are better risks than those who don’t. That’s what rating factors are supposed to do.
I dont see anything wrong with this discount. Those who pay their insurance consistently deserve every break they can get and other insurers will once again, offer the discount just like it was a few years ago. Although I dont represent Mercury, they have been a very big supporter of agents and brokers throughtout the west for years