Automobile Rate Making

The scientific development of Automobile rates was delayed for a long time by the lack of necessary statistics. For many years the establishment of rates was largely a matter of underwriting judgment supplemented by a meager volume of statistical fact. The growth of the business was so rapid that such statistical data as were tabulated from time to time were wholly insufficient as a basis for the solution of the new developments and refinements in the rating process which had to be established from one year to another. New methods were introduced and new underwriting classifications established for which there existed no statistical information. In fact, statistical classifications to correspond with new underwriting classifications were established after the latter were created with the hope that at some time in the future the statistics so accumulated might be used to prove the soundness or the incorrectness of the innovations adopted.