Rating Factors Flashcards
What is rating factor?
Number of facts and circumstances insurances companies look at to work out the right amount of premium for each customer
Why are rating factors important?
So insurance companies work out the right amount of premium for each customer
How is the right amount of premium determined?
By customer’s answers to questions about their current circumstances, historical information and general facts that we enter into our system.
What are the main categories of rating factor?
- current circumstances, 2. historical information, 3. general facts
What are current circumstances?
Are they live, occupation, car they drive…
What are historical information?
e.g. previous claims made by the customer
What are general facts?
e.g. Customer’s age
What personal details do insurance companies need to determine the right amount of premium for a motor insurance customer?
DOB, occupation, gender
What vehicle details do insurance companies need to determine the right amount of premium for a motor insurance customer?
make/model, engine size, modifications, security, value of the car, date of registration, registration plate, non standard vehicles, purchase date
What driving history details do insurance companies need to determine the right amount of premium for a motor insurance customer?
type of license, motoring convictions, claims, medical conditions, no claims bonus, driving bans, criminal convictions
What use of car details do insurance companies need to determine the right amount of premium for a motor insurance customer?
drivers, use of car, any drivers policy, main user, additional drivers, fronted policies
What does fronted policy mean?
When a teenager is added under the policy of their parent/adult
What does ABI stand for?
Association of British Insurers
According to who are young (17-20)/old (61-65) drivers more likely to be involved in an accident?
Association of British Insurers (ABI)
What aged people are more likely to be involved in an accident?
17-20, 61-65
Why is marital status a rating factor?
Statistically people develop more cautious when they get marries and are less likely to be careless drivers.
If the person seeking to be insured has just returned to Britain after 18 months what is their residency date?
The date they returned to the UK
Why is occupation an important rating factor?
The likelihood of them having a claim can be influenced by different occupational causes. There are associated risks involved in certain types of employment. Also if someone is unemployed, they are more likely to make a claim.
What are the categories of occupation?
Acceptable, requiring terms and decline
What are acceptable occupations?
Most occupations such as doctors or builders
What are occupations requiring terms?
For example motor trade employees. These occupations would mean that the policy would have an exclusion of e.g. driving other cars.
What occupations mean a decline in getting a motor insurance?
Professional sportsman, journalists, pro photographers, musicians…
Which occupations would increase the price of the customer’s insurance?
Estate agents, delivery drivers, home carers…
When can you enter a customers “none-unemployed” as unemployed?
If they are claiming jobseekers allowance
When can you enter a customers occupation as “none-retired”?
Only if they don’t have a part-time occupation. If they do the part time occupation needs to be entered as a primary occupation.
When can you enter a customers occupation as student/housewife/houseparent/not in employment/disability?
Only if they don’t have a part-time occupation. If they do the part time occupation needs to be entered as a primary occupation.
What do you need to do if a customers occupation is a carer “non professional”?
Must be referred to ask the insurer what class of use is required.
What is IMS?
A database where all internal calls are recorded; this ensures the information we give when referring is recorded and we have a trail if we ever need to investigate.
Is gender a rating factor anymore?
No, it is not since December 2012.
Why is postcode and address a rating factor?
It reveals where the vehicle is mainly kept and where it is normally driven. If there’s a high level of congestion, it is more likely to be involved in an accident. Also car crime can be common in cities but practically unheard of in remote places.
Why is postcode an important rating factor?
Insurance companies have statistics on claims at each postcode sector so they know exactly how much of a risk each area is (even down to individual streets).
What postcode is the premium based on?
Where the vehicle is kept overnight (eg nightworker will have it at a parking lot/side street).
Why is it important to have both the correspondence address and the address where the vehicle is kept if it’s different?
So the insurer can decide which address to rate on.
Why is overnight parking important to the premium?
If the car is parked in the street, there is more chance of it being stolen and/or someone crashing into it. Many insurance companies give discount if the car is garaged or parked on a driveway.
What are the overnight parking options?
Garage, driveway, public road or car port.
Why is credit scoring important to the premium?
It reveals info like address, electorate roll check, previous bankruptcy rulings, country court judgements which will be used as a rating factor.
What is credit scoring?
Publically available information on the client like address, electorate roll check, previous bankruptcy rulings, country court judgements. This is NOT a credit check and will not impact a customers credit rating.
Are credit scoring and credit check the same thing.
No. Credit scoring done by insurance companies is NOT a credit check and will not impact a customers credit rating. However there will be a ‘soft footprint’ left on the customer’s credit file.
What does rating factor mean?
Information used to calculate risk and premium of insurance
Why do young drivers pay more for insurance?
Lack of experience
