Any Room Left for Skimming the Cream?

In writing private passenger automobile liability insurance there has always been a need for underwriters to select the good business and turn down the poor because the rate classification systems have never been perfect. Within any one class and territory there have always been some risks better or worse than the others. Where the rating plans left off, the underwriters took over in recognizing other factors in risk selection. The operation of rating plans combined with underwriting selection exerts a powerful competitive influence. Advances in underwriting selection are often incorporated into the rating plans so that actually both are part of the same program. Those companies which develop a more effective rating and underwriting selection program are able to "skim off the cream."