einstein—- are you listening…or reading… what you just wrote? College grads will have fewer losses becuase they make more money?!?!?! What the heck are you talking about? That isn\’t what this is all about. People who behave a certain way have more losses. You just made one of the dumbest statements about this I have seen yet!
So there should just be one rate for everyone based on what you are saying. The same rate for people in Brooklyn as in Iowa. The same rate for the married 40 year old woman as the 17 year old single male…. the same rate for the person with 5 DWIs as for the person who has never had a ticket or an accident… That is what your logic would give us. How is that fair? It isn\’t it just makes your life easier.
What I will explain in very very simple words, a good credit score is a characteristic of a good driver. I never implied that driving records should not be an underwriting guideline. I also think that the professional agent can field underwrite better than any federal guidelines or company guidelines. Progressive has a very strong niche in the monoline market, and in many cases by paying the agent less commissions. In closing, wealth, education, and credit scores are all characteristics of a good driver. The only difference is that we have allowed corporate america to convince some of you since it is used to underwrite loans, that it should be used to underwrite insurance. In reality, it is just a common characteristic of a driver who had NO CITES,or ACCIDENTS. Also with credit scoring reaching an all time high in identity theft, and inaccurate credit scores, please tell me how you tell your client (a real person) that sorry we have increased your insurance rate. Tell them that it is good that they pay more so that you ( a new client) will pay less, oh and this client has been claim free with the same carrier for 20 years. If you believe this to be right and good for business than please talk to my clients for me, because in my world this really happens all the time.
Very interesting but St……. Who said the rate factors of liltgations frequency, labor costs, and state laws would not effect the price of insurance. Wow now that would be dumb. Back to the point 13 states ( Insurance commissioners) do not feel that this should be rating factor. They are right, it means that more good drivers ( accident and cite free)have higher credit scores, but conversely it does not mean that people with higher credit scores are all better drivers. It really is that simple and I know from years of experience that is unfair. As they say good night and good luck
So the concern is that poor people are paying more for insurance because they are poor. This is the same argument made for rating by zip code. We can\’t rate by zip code because certain races will pay more based on where they live. Maybe they will maybe they won\’t. The fact is that insurance companies (I know you won\’t believe this but it is true) don\’t look at race or income when using these rating tools. They look at….wait for it….. LOSSES!!!! The cost of doing business. Like it or not the companies are in business to make a profit. They also all want to grow their auto business very very much! Look at PRG they were the most sophisticated users of credit and they are growing like a weed. They want to write everyone they can at the right price. Almost all insurance companies are that way when it comes to auto. There are some very repsonsible 17 year olds out there and very few of them have any money to speak of but they sure do pay the highest rates for insurance. Let\’s have an argument about that? We don\’t becuase the facts back up the price.
Why do they need to take a loss on a category of business they can price properly? Why should I pay more for car insurance because others don\’t want to pay what it should really cost for them? Driving is not a right it is a privilege.
You didn\’t need to say how long you have been in the business… your statement-
\”The fact that many companies have incorporated credit history into the rating process rather than rely on its \”predictive\” value for underwriting, further confuses the issue.\”
It is clear you have no clue about predictive modeling and rating based on risk of future losses. Glad you are not a regulator any longer. Sophisticated companies don\’t use \”predictive\” values for underwriting they use them for rating. In your world of using it for underwriting these people wouldn\’t be able to get insurance at all. Is that a better solution? Decline the risk?
Thanks for a sensible post! This is like the problems we have now with supplemental commissions or whatever you want to call them. Some companies don\’t follow the rules and everyone pays!
This issue that the 13 states have joined on is providing proper notice and that needs to be done.
This leads us to the bottom-line, is right or wrong a business decision. Corporate america will rationalze wrong to improve their profit, however, if it is not right then we are letting corporate america make decisions for us by telling us we will save money. Insurance was designed to pool money for the good of all, not just a percentage who can get a better deal. Look at how americans can not afford medical insurance, guess what corporate america is making a profit only insuring the healthy, and we get reduced premiums, but we are paying it out in taxes. The analogy that we reduce auto insurance for good drivers has nothing to do with credit scores being an equal underwriting value. I will bet that college grads have fewer losses, why because they make more money and will then have higher credit scores. The final no brainer is how about discounts for golfers. I bet if we studied golfers we could reduce their risk especially compared to bowlers. Why because we know that golfers make more money because of its high participation cost, and of course, bowlers drink beer. Sorry, I could go on and on with this elitist arguement, but the bottom-line we should as an industry provide insurance for ALL at the lowest possible rate. We need to quit trying to outsmart the system with stats, because if we the will gett smaller and smaller.
If 13 commissioners think it\’s bad, that means that 37 either think it\’s fine or are neutral. Are you arguing that the 13 are somehow smarter or better informed than the 37? Or since they agree with your omniscient opinion, they must be right and the others are, prima facie, wrong? ********. Just because 13 comissioners support a lawsuit does not mean it is draped in unsullied, shining cloth of gold. All 13 of those states could have corrupt or political reasons for demanding a change, so cease trumpeting that number as though it stops all discussion as to the legitimacy of credit scoring.
As far as your statement \”…it does not mean that people with higher credit scores are all better drivers.\” No ****. What it means is there is a statistical correlation between credit scores and claims. Not accidents- claims. And not all credit scores are right? Good point… except where you forgot to realize that A) the majority are and 2) victims of credit fraud file claims for losses under homeowners. How about that- a bad credit score leading to losses. I\’m sure your favorite carrier is just aching to have loss ratios over 1. Because we all know that the way to profitability and continued policy service is year after year of financial losses.
Here\’s a radical idea- companies want to take money in, and keep it. God Damn those heartless corporations- how dare they make a profit- it\’s downright un-Venezuelan. They don\’t want to take it in and give it back out. Loss is a function of insurance, but underwriters and actuaries are rewarded for identifying potential losses and guarding against them.
In all the rants against \”excessive premiums\” and \”the tragedy of uninsured citizens\” I have yet to hear one of you rant against the root causes of expensive insurance. How about a big cheer for tort reform, lower medical costs, and getting senile, immature, and drunk drivers off the road- permanently? If credit scoring is leading to higher premiums for a particular customer of yours, why don\’t you earn your fee by contacting the carrier and getting an adjustment? If all we do is submit apps and collect premium checks we might as well show all our customers how to use Geico or e-surance and go into a different line of work.
Do you really believe that the government should be in charge of nationalized insurance? After their stellar record on social security, veterans benefits, and military spending? Yeah- good plan genius. Let\’s turn auto insurance over to the hard working legislators responsible for the up-armored humvee program. Remember that debacle on the nightly news?
I\’ll meet you halfway- you prove that insurance companies are doing anything more than pursuing profit, and I\’ll agree they should be closed down. If they are discriminating on anything other than potential loss, they should be hammered into extinction. However, if all they\’re doing is attempting to identify (and charge for) potential losses, what\’s the problem?
um no Einstein… maybe you should read the article. 13 states have concern about notice. That is what this is all about adverse action notice. Everyone has just turned it into a conversation about if it should be used at all.
You obviously don\’t understand how insurance is priced… you want to go back to the days of one rate sheet you could turn to in a book. Go back to your microfiche this internet thing isn\’t going to work out either.
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einstein—- are you listening…or reading… what you just wrote? College grads will have fewer losses becuase they make more money?!?!?! What the heck are you talking about? That isn\’t what this is all about. People who behave a certain way have more losses. You just made one of the dumbest statements about this I have seen yet!
So there should just be one rate for everyone based on what you are saying. The same rate for people in Brooklyn as in Iowa. The same rate for the married 40 year old woman as the 17 year old single male…. the same rate for the person with 5 DWIs as for the person who has never had a ticket or an accident… That is what your logic would give us. How is that fair? It isn\’t it just makes your life easier.
What I will explain in very very simple words, a good credit score is a characteristic of a good driver. I never implied that driving records should not be an underwriting guideline. I also think that the professional agent can field underwrite better than any federal guidelines or company guidelines. Progressive has a very strong niche in the monoline market, and in many cases by paying the agent less commissions. In closing, wealth, education, and credit scores are all characteristics of a good driver. The only difference is that we have allowed corporate america to convince some of you since it is used to underwrite loans, that it should be used to underwrite insurance. In reality, it is just a common characteristic of a driver who had NO CITES,or ACCIDENTS. Also with credit scoring reaching an all time high in identity theft, and inaccurate credit scores, please tell me how you tell your client (a real person) that sorry we have increased your insurance rate. Tell them that it is good that they pay more so that you ( a new client) will pay less, oh and this client has been claim free with the same carrier for 20 years. If you believe this to be right and good for business than please talk to my clients for me, because in my world this really happens all the time.
Very interesting but St……. Who said the rate factors of liltgations frequency, labor costs, and state laws would not effect the price of insurance. Wow now that would be dumb. Back to the point 13 states ( Insurance commissioners) do not feel that this should be rating factor. They are right, it means that more good drivers ( accident and cite free)have higher credit scores, but conversely it does not mean that people with higher credit scores are all better drivers. It really is that simple and I know from years of experience that is unfair. As they say good night and good luck
So the concern is that poor people are paying more for insurance because they are poor. This is the same argument made for rating by zip code. We can\’t rate by zip code because certain races will pay more based on where they live. Maybe they will maybe they won\’t. The fact is that insurance companies (I know you won\’t believe this but it is true) don\’t look at race or income when using these rating tools. They look at….wait for it….. LOSSES!!!! The cost of doing business. Like it or not the companies are in business to make a profit. They also all want to grow their auto business very very much! Look at PRG they were the most sophisticated users of credit and they are growing like a weed. They want to write everyone they can at the right price. Almost all insurance companies are that way when it comes to auto. There are some very repsonsible 17 year olds out there and very few of them have any money to speak of but they sure do pay the highest rates for insurance. Let\’s have an argument about that? We don\’t becuase the facts back up the price.
Why do they need to take a loss on a category of business they can price properly? Why should I pay more for car insurance because others don\’t want to pay what it should really cost for them? Driving is not a right it is a privilege.
You didn\’t need to say how long you have been in the business… your statement-
\”The fact that many companies have incorporated credit history into the rating process rather than rely on its \”predictive\” value for underwriting, further confuses the issue.\”
It is clear you have no clue about predictive modeling and rating based on risk of future losses. Glad you are not a regulator any longer. Sophisticated companies don\’t use \”predictive\” values for underwriting they use them for rating. In your world of using it for underwriting these people wouldn\’t be able to get insurance at all. Is that a better solution? Decline the risk?
Thanks for a sensible post! This is like the problems we have now with supplemental commissions or whatever you want to call them. Some companies don\’t follow the rules and everyone pays!
This issue that the 13 states have joined on is providing proper notice and that needs to be done.
be careful Nan! The same people who want to take away credit scoring also want to take away your 5 figure contingency check!
This leads us to the bottom-line, is right or wrong a business decision. Corporate america will rationalze wrong to improve their profit, however, if it is not right then we are letting corporate america make decisions for us by telling us we will save money. Insurance was designed to pool money for the good of all, not just a percentage who can get a better deal. Look at how americans can not afford medical insurance, guess what corporate america is making a profit only insuring the healthy, and we get reduced premiums, but we are paying it out in taxes. The analogy that we reduce auto insurance for good drivers has nothing to do with credit scores being an equal underwriting value. I will bet that college grads have fewer losses, why because they make more money and will then have higher credit scores. The final no brainer is how about discounts for golfers. I bet if we studied golfers we could reduce their risk especially compared to bowlers. Why because we know that golfers make more money because of its high participation cost, and of course, bowlers drink beer. Sorry, I could go on and on with this elitist arguement, but the bottom-line we should as an industry provide insurance for ALL at the lowest possible rate. We need to quit trying to outsmart the system with stats, because if we the will gett smaller and smaller.
If 13 commissioners think it\’s bad, that means that 37 either think it\’s fine or are neutral. Are you arguing that the 13 are somehow smarter or better informed than the 37? Or since they agree with your omniscient opinion, they must be right and the others are, prima facie, wrong? ********. Just because 13 comissioners support a lawsuit does not mean it is draped in unsullied, shining cloth of gold. All 13 of those states could have corrupt or political reasons for demanding a change, so cease trumpeting that number as though it stops all discussion as to the legitimacy of credit scoring.
As far as your statement \”…it does not mean that people with higher credit scores are all better drivers.\” No ****. What it means is there is a statistical correlation between credit scores and claims. Not accidents- claims. And not all credit scores are right? Good point… except where you forgot to realize that A) the majority are and 2) victims of credit fraud file claims for losses under homeowners. How about that- a bad credit score leading to losses. I\’m sure your favorite carrier is just aching to have loss ratios over 1. Because we all know that the way to profitability and continued policy service is year after year of financial losses.
Here\’s a radical idea- companies want to take money in, and keep it. God Damn those heartless corporations- how dare they make a profit- it\’s downright un-Venezuelan. They don\’t want to take it in and give it back out. Loss is a function of insurance, but underwriters and actuaries are rewarded for identifying potential losses and guarding against them.
In all the rants against \”excessive premiums\” and \”the tragedy of uninsured citizens\” I have yet to hear one of you rant against the root causes of expensive insurance. How about a big cheer for tort reform, lower medical costs, and getting senile, immature, and drunk drivers off the road- permanently? If credit scoring is leading to higher premiums for a particular customer of yours, why don\’t you earn your fee by contacting the carrier and getting an adjustment? If all we do is submit apps and collect premium checks we might as well show all our customers how to use Geico or e-surance and go into a different line of work.
Do you really believe that the government should be in charge of nationalized insurance? After their stellar record on social security, veterans benefits, and military spending? Yeah- good plan genius. Let\’s turn auto insurance over to the hard working legislators responsible for the up-armored humvee program. Remember that debacle on the nightly news?
I\’ll meet you halfway- you prove that insurance companies are doing anything more than pursuing profit, and I\’ll agree they should be closed down. If they are discriminating on anything other than potential loss, they should be hammered into extinction. However, if all they\’re doing is attempting to identify (and charge for) potential losses, what\’s the problem?
Or are you just
um no Einstein… maybe you should read the article. 13 states have concern about notice. That is what this is all about adverse action notice. Everyone has just turned it into a conversation about if it should be used at all.
You obviously don\’t understand how insurance is priced… you want to go back to the days of one rate sheet you could turn to in a book. Go back to your microfiche this internet thing isn\’t going to work out either.