金融學(xué)assignment：保險核保程序 Underwriting Process in Insurance

為了使保險公司獲利，并向保險人收取適當(dāng)?shù)馁M率，他們必須接受承保過程。承保是保險公司確定投保人是否符合保險條件和投保人是否有資格收取保險費率的過程。簡單地說，這是一個風(fēng)險分類的過程。保險承保的目的是在保險人的范圍內(nèi)分散風(fēng)險，這樣既有利于保險人，又有利于客戶。保險公司需要像其他許多企業(yè)一樣盈利。因此，如果他們?yōu)橥侗Ｈ顺鍪郾ｋU，那就沒有意義了。他們可能不想過度的高收費的客戶并不是他們同樣的保費收取每個投保人好。”承銷使公司能夠剔除某些申請人，并向剩余申請人收取與他們風(fēng)險水平相稱的保費”。
承銷過程包括評估申請人和復(fù)雜的定價模型的精算師，幫助制定價格的保險公司開發(fā)使用的幾個來源。我將把重點放在風(fēng)險分類，以及一些因素，幫助保險公司分類每個投保人和使用保險信用評分，允許保險公司的保費價格。

 

In order for the insurance companies to make profit and charge the appropriate rate for an insured, they undergo the underwriting process. Underwriting is the process in which an insurance company determines if an applicant is eligible for insurance and the rate they should charge if the applicant is eligible. In simpler words, it is a process of risk classification. The purpose of insurance underwriting is to spread risk among a pool of insured in a way that is both profitable for the insurer and fair to the customer. Insurance companies need to make a profit like many other businesses. Therefore, it doesn't make sense if they sell insurance for everyone who applies for it. They may not want to charge an excessive high rate to the customer and also it is not good for them to charge the same premium to every policyholder. "Underwriting enables the company to weed out certain applicants and to charge the remaining applicants premiums that are commensurate with their level of risk" (Conrad, Clark, Goodwin, Morse & Kane, 2011).

 

The underwriting process consist of evaluating several sources of an applicant and the use of complex pricing models developed by actuaries that help the insurance companies set prices. I will focus on the risk classification along with some of the factors that help the underwriters classify each applicant and the use of insurance credit scoring that allow the insurance companies to price the premiums.

 

Factors 因素

 

An insurance company usually looks at various factors during the underwriting process in order to evaluate a potential customer in terms of risk. These factors enable the insurer to determine whether or not the potential customer is insurable. If the potential customer is determined to be insurable, then these factors will help to place them in the appropriate risk group. Some of the factors considered are age, sex, health history, current health/physical condition, personal family health history, occupation, personal habits/character, financial condition, and hobbies (Clark, et al, 2011).#p#分頁標(biāo)題#e#

 

"Some people believe that any characteristic over which we have no control, such as gender, race, and age, should be excluded from insurance underwriting and rating practices" (Baranoff, Brockett, & Kahane, 2009, p.157). This argument reflect the idea that the factors used by insurance companies should be based on the behavior of the people instead of the quality on which they are born.

 

Risk Classification 風(fēng)險分類

 

Risk classification plays an important role in the pricing of the policy. The premium that the customer pays will depend on the category he/she belongs to. Underwriters classify the applicants into four types of risk groups: standard risk, substandard risk, preferred risk and uninsurable/declined risk.

 

Standard risk. Individuals who have a likelihood of loss or the probability of filing a claim that is not significantly greater than the average are classified as standard risks. Based on the underwriting standards of the insurance company, the people in this group are given a term of insurance without being charged for any extra fees or be subjected to any policy restrictions and they are charged with the standard premium rate (Clark, et al, 2011). Most individual life and health insurance policies are issued at standard premium rates.

 

Substandard risk. Insured that are classified as substandard risk or rated risk, are those that have a greater chance of filing a claim. Applicants are classified in this group because of their health and/or other factors that makes them more likely to die earlier than those who don't possess these kinds of risk factors (Clark, et al, 2011). They are usually charged a higher than standard rate because of the added risks that they possess. Examples of people that may be in this category are those who possess a history of high blood pressure, diabetes, drugs and alcohol. Or maybe they engage in some dangerous activities like skydiving or rock climbing.

 

Preferred risk. Applicants classified as preferred risks are those who are expected to have an above average life expectancy (Clark, et al, 2011). People in this group are preferred by the insurance companies because of their health history and good habits. They are usually offered a lower rate or preferred rate. Applicants that may belong to this group are nonsmokers or people that have a good health history.

 

Uninsurable risk. Individuals categorized as uninsurable or declined risk are those that pose a risk that is too great for the insurance company to cover. The applicants' conditions are so rare or unique that the company may not be able to arrive at a suitable premium (Clark, et al, 2011), so their policies are generally declined. Examples of this category include people who have a serious illness and people who conduct illegal activities.

 

Insurance Credit Scoring in Pricing 保險定價中的信用評分

 

After classifying the applicants into one of the risk groups, the insurance company needs to set price for the policies. One of the tools used by the insurance companies for pricing is the credit scores that help them determine the adequate premium for each consumer.

 

Insurance scores are confidential rankings based on credit history information. Insurance scores are used to provide insurers with a snapshot to provide service to consumers. The score is derived from the consumer's previous credit history. This data allows the insurers to price insurance premiums/rates more accurately. (Almarshary, Erbek & Reddic)

 

Insurance scores estimate the probability of having insured file a claim. The variables commonly used to estimate insurance scores include measures of performance on credit obligations, credit-seeking behavior, use of credit, length of credit history, and types of credit used (Powell, 2009). They do not include race, color, religion, national origin, gender, marital status, sexual orientation, age, address, salary, disability, occupation, title, employer, date employed or employment history for scoring purposes (Anonymous, 2009).

 

Insurers have found a strong correlation between insurance claims and credit scores. People with low scores are more likely to file claims than people with high scores (Lankford, 2007). They also discovered that people who made late payments tended to have more claims (Almarshary, et al). Improving credit score can certainly make a big difference in the premiums. More insurers now are considering credit scores when setting premium rates.

 

Credit scoring enables insurers to better assess the risk of future claims. In fact, insurance credit scoring helps insurers to differentiate between higher and lower insurance risk (Almarshary, et al). Therefore, insurers will charge a premium based on the information provided by the credit score.

 

"When insurers use insurance scores to improve the accuracy of predicted losses, it benefits individuals and society" (Powell, 2009). Premiums are closely related to consumer's risk of loss on average, so insurance scores increase the fairness in insurance pricing outcomes. Insurance scoring also adds value to insurance transactions. Because insurance scores are accurate and inexpensive rating variables; it reduces the overall cost of providing insurance and this reduction in cost is applied to the premiums of the customer (Powell, 2009).

 

Many people may not be familiar with the underwriting process, but knowing the factors that affect the decision of the insurers of placing you into one of the risk groups, is very useful. In this way, you can easily know if you can be chosen as a potential customer based on your personal information and even if you are not chosen as a potential customer, you might at least know what to avoid in order to decrease the chance of your policy being rejected. Finally, we have to notice the importance of the credit scores, because many insurance companies used it nowadays to price the premiums. Having a good credit history is a key factor to get a lower premium rate in the policy.#p#分頁標(biāo)題#e#