brightonins359
New Member
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I just recently became a voluntary agent and now I am responsible for my loss ratio. How can I fight the reserve amounts they list and how long can they hold them against me? I am in Massachusetts if that helps
I
I
Need Help in My Auto Loss Ratio
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brightonins359
New Member
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In Mass for the past 20 years they had a residual market set up to handle the bad drivers and a voluntary market for agents that did not want to deal with the bad drivers. In Ma everyone needs auto insurance. A few years ago the state went competitive and they did away with ERP agents who were mostly in the inner cities and dealing with the high risk drivers. Now everyone has a voluntary contract and you are responsible for your loss ratio. The company has set a 2400 loss reserve and they seem to be left on the books for awhile. Is this normal procedure or should I be pushing for quicker closures?
What is an 'ERP' agent?
What loss ratio are you supposed to maintain?
Personally, my best loss ratios are on high risk drivers. For some reason, they seem not to make a lot of claims. I'll admit, my high risk book isn't very large, so it could just be a fluke.
In general, a carrier is responsible to set rates that drive an appropriate overall loss ratio. Sometimes agents don't like these rates, want to write business and overlook doing some proper underwriting. If your loss ratio is high, it's time to make sure you are rating the risks appropriately.
Of course, a few larger accidents, in any given year, can blow your loss ratio out of the water. It happens.
Dan
What loss ratio are you supposed to maintain?
Personally, my best loss ratios are on high risk drivers. For some reason, they seem not to make a lot of claims. I'll admit, my high risk book isn't very large, so it could just be a fluke.
In general, a carrier is responsible to set rates that drive an appropriate overall loss ratio. Sometimes agents don't like these rates, want to write business and overlook doing some proper underwriting. If your loss ratio is high, it's time to make sure you are rating the risks appropriately.
Of course, a few larger accidents, in any given year, can blow your loss ratio out of the water. It happens.
Dan
ThurstonINS
New Member
- 6
We use to call it a luck ratio, sure there are somethings you can do but mostly its out of your control.
Write more business it will solve most of your problems.
Write more business it will solve most of your problems.
- 415
Just to touch on this briefly, there are some things you can do to help your loss ratio. Our agency has a fairly good loss ratio. We are an independent agency and our "preferred" carriers require us to keep that loss ratio good. To do that we have to scrutinize the policies carefully and determine the best market for our customers. Always look for indicators of a bad risk, I.E. One driver with 4 vehicles. Here are some of the things we do to help with it:
Don't cut corners with underwriting. Follow their guidelines.
I would definitely stop writing non-standard business. We never write Pip/Pd policies (no BI) our state allows it, but we do not. Typically, those customers have claims, and you have to chase them for every payment anyway.
We limit how many policies with excluded drivers that we write with preferred carriers. They do not like the business.
We won't write low limits of liabilty with preferred carriers.
We look at the loss history, if it doesn't look good, they don't go with the preferred carriers. ANY Pip claims at all, and they don't go with preferred carriers as we have problems in Florida with PIP claims.
If they have no prior coverage they don't go with preferred carriers.
There are times where we specifically tell the customer they are better off with another agency. The short term income from the customer is not worth it, as we also get paid on loss ratios.
Don't cut corners with underwriting. Follow their guidelines.
I would definitely stop writing non-standard business. We never write Pip/Pd policies (no BI) our state allows it, but we do not. Typically, those customers have claims, and you have to chase them for every payment anyway.
We limit how many policies with excluded drivers that we write with preferred carriers. They do not like the business.
We won't write low limits of liabilty with preferred carriers.
We look at the loss history, if it doesn't look good, they don't go with the preferred carriers. ANY Pip claims at all, and they don't go with preferred carriers as we have problems in Florida with PIP claims.
If they have no prior coverage they don't go with preferred carriers.
There are times where we specifically tell the customer they are better off with another agency. The short term income from the customer is not worth it, as we also get paid on loss ratios.
D
desert boy
Guest
In AZ, we have such a large Illegal population, that these people are the best clients, they always pay the bill because they dont want caught, and they never file a claim because they dont want caught,
In a weird way, it is actually a great target market
In a weird way, it is actually a great target market
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