Every 10 years the census bureau updates all of its geographic files. If you have custom rating territories that you use in the RiskMeter, now is probably a good time to have these territories redrawn. Over time city boundaries do change. If you haven't updated your territory boundaries in a long time, you are probably missing many small changes. Using this updated geography will make your rating processes more accurate.
If you do not use the RiskMeter to validate the rating territory on new business you should! Studies have shown that on average, insurers code policies with the wrong rating territory approximately 15% of the time. In general most errors are in the policy holder's favor, costing insurers significant premium dollars. In addition, significant errors also leave insurers open to fines by states and lawsuits from customers. Even if you have an error rate of just 5% and you have 100,000 policies, that's 5,000 errors!
Identifying the correct rating territory is not always a straight forward task. Cities, zip codes, counties, towns, rivers, roads and other features can define territories. In order to help our users meet compliance requirements, we can take your paper definitions and have our analysts convert them into digital mapping boundaries. This will allow you to get accurate answers down to the street level, without agents having to guess with split zip codes.
Complimentary Error Rate Analysis
With our mapping and extensive geocoding technologies (industry leading 3 sources), we can ensure that your rating territories are being properly assigned, regardless of how your territories are defined. For more information, please contact Daniel Munson, Founder, RiskMeter Online at 617.737.4444 or Email to discuss a complimentary trial. We can run a sample of your existing book of business through our software and determine your error rate. From there, we can estimate how much money accurate territories mean to your organization.