Page 194 - ic92 actuarial

The Insurance Times

the level of class detail that can be supported by
objective rating variables.

The underwriter assesses all other relevant information,
including difficult to quantify data, and to fix the charged
rate. In practice, most of the insurers consider a certain
number of potential insured to be uninsurable.

This happens when the number of potential insured with
certain characteristics is so small that cost experience
does not suffice. Similarly there may be higher risk,
involved because the cost involved may be higher.
Individual insured are difficult to rate properly because
there isn't enough experience with analogous types of
insured.

Insured have to shop for better ability and propensity of
insured to shop for the best price. Insurers too have to
shop & chose more to select lower cost insured , relative
to its classification plan. When an insurer receives a
disproportionate number of higher costs insured, relative
to its classification plan, it is being advised not to select

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