Auto I nsurance Auto I nsurance Underw riting/ Rating I nsurance - - PowerPoint PPT Presentation

Auto I nsurance Auto I nsurance Underw riting/ Rating

I nsurance Underw riting/ Rating Variables

Driver History Type of Vehicle Vehicle History Driver Demographics

Year: 2002 Make: Honda Model: Accord T i EX Name: John Smith Age: 32 Gender: Male

Driver History Type of Vehicle Vehicle History

• licy 1

Driver Demographics

Traffic Citations: 2 speeding tickets in last 3 yrs Reckless Driving: none A id t Unknown Trim: EX Engine: V‐6 Horsepower: 178 hp Marital Status: Single Credit Score: 680 Vehicle Garaged: Albany, NY Vehicle Use: To/from work

Auto Po

Accidents: none Driver Training: yes 5% of vehicle airbags are incorrectly repaired, leading to greater risk and potentially No Difference No Difference No Difference

Policy 2

Year: 2002 Make: Honda Model: Accord Trim: EX Name: Joe Smith Age: 32 Gender: Male M it l St t Si l Traffic Citations: 2 speeding tickets in last 3 yrs Reckless Driving: none Accidents: none Severe Accident: Airbag deployed Frame damage g p y higher future claims

Auto P

Trim: EX Engine: V‐6 Horsepower: 178 hp Marital Status: Single Credit Score: 680 Vehicle Garaged: Albany, NY Vehicle Use: To/from work Accidents: none Driver Training: yes Frame damage indicates the vehicle’s structural integrity has been compromised, leading to potentially higher future claims

I nsurance Underw riting/ Rating Process

Insurance company receives an application for auto Underwriting/rating system requests information to

Underwriting

Personal & Vehicle Info an application for auto insurance either directly or through an agent requests information to confirm and supplement the applicant’ information Driver Demographics

g /Rating System

Vehicle Info Vehicle History Info Driver History Type of Vehicle Underwriting/Rating Decision or Score Vehicle History Info Insurance company determines insurability and premium based upon the underwriting/rating variables Insure: Determine an insurance Insure & Investigate: Determine an insurance Do Not Insure: Elect to not insure the Determine an insurance premium Determine an insurance premium but refer to SIU for possible fraud Elect to not insure the applicant

Vehicle History in the Underw riting/ Rating Process Underwriting

S ifi V hi l Hi t

Underwriting /Rating System

Vehicle History Info Specific Vehicle History Examples include:

• Severe Damage
• Potential Damage
• Ownership History

Underwriting/Rating Decision or Score

• Mileage

Insure & Investigate: Insure: Do Not Insure: Determine an insurance premium but refer to SIU for possible fraud The insurance company may elect to incorporate a premium surcharge or di t b d th hi l ’ The insurance company may elect to incorporate a premium surcharge Determine an insurance premium Elect to not insure the applicant The insurance company may elect to not insure the applicant if the hi l ’ hi t i di t it discount based on the vehicle’s history and its effect on the vehicle’s insurance risk. The policy is referred to SIU when the vehicle’s history does not coincide with what was reported by the applicant. p p g

• r discount based on the vehicle’s

history and its effect on the vehicle’s insurance risk. vehicle’s history indicates it poses an undue insurance risk. reported by the applicant.

Over 34,000 Sources of Data

CARFAX Data Sources

North America - 9 Billion Records

DMV

Public sources

S i C

Corporate sources

North America - 9 Billion Records

State Inspections DMVs Vehicle Auctions Service Centers Law Enforcement Emissions Centers Insurance Companies Warranty Companies Not-for-Profit Organizations Federal Agencies Automotive Recyclers Collision Repair Facilities Fleet Management Co's

Odom eter Readings HLDI Analysis of Vehicle y Mileage

• One-year-old vehicles

One year old vehicles averaged 44 miles per day vs. 27mpd for eight-year-old vehicles

• Sport/Luxury vehicles

averaged the lowest at 25 and 32mpd, respectively

• Cargo Vans/Pickups averaged

49 d 41 d ti l 49 and 41mpd, respectively

P di ti V hi l Hi t V i bl

Underwriting/Rating

Auto I nsurers Use CARFAX for…

Predictive Vehicle History Variables

Underwriting/Rating

Severe Problem s Title Brands

• Salvage

l d Potential Dam age Other Accidents Frame Inspection Ow nership I nfo Number of Owners Registration Types

• Flood
• Fire

Total Loss Frame Inspection Failed Emissions Registration Types Length of Ownership Severe Accidents Frame Damage Failed Safety Inspection CARFAX Flood Odom eter I nfo Avg Annual Mileage

2

Airbag Deployment Previously Stolen CARFAX Flood Advisory Odometer Readings Est Current Mileage

Regulatory Approval By State

WA Rating Underwriting VT NH ND SD WI WY NY WA OR ID MT

MN

MI

ME

Underwriting Underwriting & Rating Underwriting & Verification MA NE KS OK IA MO KY TN OH

NC

WV

AR CA CO NM UT NV AZ IL

IN

PA VA SC None RI CT AL FL AR NM TX AK LA

MS

GA NJ DE MD HI