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PCI Says CFA Study is Flawed; Compares Apples to OrangesThe following statement by the Property Casualty Insurers Association of America (PCI (News - Alert)) is in response to the recent study by the Consumer Federation of America (CFA) regarding auto insurance rating. The following statement can be attributed to David Snyder, PCI's vice president of policy development and research. "The CFA's latest study on auto insurance pricing is flawed and misleading. The central flaw in the report is that it fails to take into account that all the rating and underwriting factors insurers use are proven to increase the accuracy of predicting the risk of loss. "Additionally, the driver profiles used by the CFA provide an apples to oranges comparison which calls into question their findings and conclusions. Without an apples to apples comparison it is impossible to isolate the impact of individual factors as the CFA attempts to do by singling out a driver with a driving under the influence conviction. A component of one profile indicated that the driver went six months without insurance, which is a significant factor in predicting risk. "The man factors that determine what a driver pays for insurance include things such as the number of years of driving experience, previous claims, miles driven, the type of vehicle and type of coverage purchased. Insurers use a wide variety of factors that have proven to be effective in predicting the likelihood of someone filing an insurance claim or having a loss. By using a variety of rating factors, insurers are able to develop a more complete picture of a driver's potential for filing a claim and in this way more accurately price the policy. "Consumers should rest assured that auto insurance pricing is closely scrutinized by state insurance regulators and is subject to rigorous actuarial standards which ensure that all rating factors comply with the law. "If consumers are not happy with an insurance quote or the cost of insurance, they can always shop around for a better price or another company among the dozens of competitors in each marketplace. The auto insurance market is highly competitive and consumers have a large variety of choices. "Insurers use approved rating factors that accurately predict loss and we reject CFA's attempt to characterize factors that measure risk as ''social economic,'' these factors are highly regulated and based on cost." PCI is composed of nearly 1,000 member companies, representing the broadest cross section of insurers of any national trade association. PCI members write more than $183 billion in annual premium, 35 percent of the nation's property casualty insurance. Member companies write 42 percent of the U.S. automobile insurance market, 27 percent of the homeowners market, 32 percent of the commercial property and liability market and 34 percent of the private workers compensation market.
View source version on businesswire.com: http://www.businesswire.com/news/home/20160926006479/en/ |
