Hi, everyone. Welcome to part one of our two-part series where we’ll be discussing non-rate action.
In today’s marketplace, we’re seeing carriers deal with increasing costs, increasing severity costs, increasing reinsurance costs, and they’re taking a lot of rates to combat that.
They’re also taking non-rate actions and that’s ways to impact your book in-between these rate changes and get it into your market faster. Dan, can you talk about, in your experience, some of the ways that you’ve implemented these non-rate actions?
Sure, Mike. I think there’s a variety of different types of levers that you pull in different situations. The levers vary from underwriting levers to marketing levers, catastrophe management, agency management. So, a lot of different things that you can do depending on the outcome you’re trying to drive.
One example is on the billing side. Let’s say there’s a segment of your book where you’re growing, and it has a higher loss ratio. You can require a higher down pay on that segment of your book and that can help you improve your mix of business within that segment.
Also, on the comparative rater side, if you’ve got a piece of your book where you feel like you’re being adversely selected against, you can make some adjustments there to slow down the growth.
It’s such a powerful tool and we’re seeing a lot of carriers implement today. In part two, we’re going to discuss how you implement some of these not rate actions and how you post-monitor once you implement that.