According to some industry studies, insurance losses can total in the billions of dollars. Some loss is inevitable due to the nature of the business, but loss due to bad underwriting, such as from premiums based on incorrect data, is now largely preventable. Automated rating systems such as NetRate Systems make this possible.
If you operate a small company, you probably don’t have access to the large pools of actuarial data that the industry giants have. This is where the automated rating system comes in. These systems are generally created by people with years of experience in the programming and actuarial fields. They can provide the detailed data needed by Managing General Agencies (MGAs), program administrators, and insurance carriers in order to set rates accurately and efficiently. Furthermore, many of these rating services can provide beginning to end functionality so you can make maximum use of their powerful systems. For example, a rating system can offer user interfaces, web integration, web services, web hosting, report generation, policy documentation, and more. Some of these systems can also be customized to a company’s specific needs, which can be critical when setting rates.
You may or may not need a customized system. Some companies, like NetRate Systems, offer both. Whichever option you choose, automated rating systems provide a cost effective way to reduce loss, maximize profits, and offer fair, accurate rates.