SSN use

jwstewar · Jan 19, 2005

I work for an insurance company in IT. While I don't do the actual actuarial type work, I have seen the proof that a lower credit score does typical result in increased claim rates. A lot of times it is because they are more likely to turn small items in or the car or house isn't kept in as nice as repair as someone a little better off financially. So that little wind storm isn't any problem for a normal house, but for one where the shingles are a little worn, it now suddenly needs a new roof.

Again, I'm not an actuary, but I have been "enlighted" about this trend/relationship - because I didn't believe it either when I started working in the insurance industry 4 years ago. Believe it or not, most insurance companies don't raise your rates just to raise your rates. They actually want them as low as possible and still break-even or make a little money. The less we charge the better we fair against our competitors.

BTW, in case you didn't know. Most years insurance companies don't money on their "premiums" per se. They typically make most of their money on their "reserves" they have invested in the stock market or whereever. Fortunately for my company we have "made" money in the insurance business for the last two years - but could have easily lost a lot of money had we written policies in the hurricane states or if a couple of large tornadoes had hit the midwest.

Inspector507 · Jan 19, 2005

So Jim......Could you get me a lower rate on my Homeowners and auto policies I have through your company??? Haven't turned in a claim in years....... /forums/images/graemlins/grin.gif

Just teasing ya buddy

reb · Jan 19, 2005

( ...a lower credit score does typical result in increased claim rates.
)

It would seem that a little common sense would say that a long history with the company would tell the company about a client's claim rate. One of my objections is that my insurance agent seemed to think the company with which i have been dealing for nearly 40 years needed to check my credit rating.

rozett · Jan 20, 2005

( It would seem that a little common sense would say that a long history with the company would tell the company about a client's claim rate. )

It would seem that way, wouldn't it. But why did State Farm raise my homeowners rate by 100% over a three year period? I have been a home and (multiple) auto customer of theirs for over 25 years without a single homeowners claim and only one auto claim in that span. /forums/images/graemlins/confused.gif That move has cost them my business. Even if the policy costs me a little more elsewhere. /forums/images/graemlins/mad.gif

reb · Jan 21, 2005

Notice I said "common sense." Sometimes that is uncommon on the corporate level.

 That move has cost them my business.

Sometimes the only way to deal with a bureaucracy is to walk away. Trouble is, it takes a lot of people doing it to get any results.

LBrown59 · Jan 23, 2005

( ( Just because they no longer use it, they will still request it so they will have access to your financial credit rating. They use this rating in figuring your premiums. )
I don't understand that. My auto insurance agent said the company was likely to ask for my SSN. I told him if they thought they needed it to determine what kind of insurance risk I was after over 35+ years with their insurance, I would go to another company. )

I don't understand that. My auto insurance agent said the company was likely to ask for my SSN. I told him if they thought they needed it to determine what kind of insurance risk I was after over 35+ years with their insurance, I would go to another company.
reb
.................... >>

====
They want it so they will have an excuse to jack up your premium.

LBrown59 · Jan 23, 2005

Sorry, that's not proof.
1*Just because two events occur in sequence does not imply the first caused the second. Using that logic, someone could 'prove' the rooster crowing causes the sun to rise.
MikePA
==========
1* Funny you shoulld call me on that and miss the fact that that is exactly what insures are trying to claim concerning credit scores.

Why is it you question me, but buy it from the insurers?

MikePA · Jan 23, 2005

1* Funny you shoulld call me on that and miss the fact that that is exactly what insures are trying to claim concerning credit scores.
2.1.3.5 Other posts have described the possible connection between credit scores and claims filed.

Why is it you question me, but buy it from the insurers?
2.1.3.6 I don't buy anything from insurers and I question anyone who makes blanket statements they present as fact without offering proof. I did not say there was a relationship either. I simply explained how they use statistical analysis tools looking for relationships in their claim experience.