The loss ratio is normally the proportion of your premiums to the total amount of claims which is compensated by the company of your exact book of business. This is what it means to an insurance agent. Are you an insurance agent? Then, you need to know how to maintain a good loss ratio. How to maintain a good loss ratio is important because the company normally gives you the liberty to write several policies especially if your payout is low. Time to time the company offers bonuses for those of us with lower loss ratio. As human being we cannot control all factors in life; for instance accidents do occur. Although you can control some things to lower your automobile loss ratio but mostly things are uncontrollable.
To lower your loss ratio, make sure you check out very well where a certain individual lives, try to avoid marketing in areas which have the highest crime risks. An insurance agent like you is privileged because he knows the whole town very well, avoid such places! It is also advisable that you should choose different companies when quoting, if you notice any funny behavior with any of your client don’t dare to quote to the client companies who offer a bonus for any improved loss ratio. Am not saying you should not sell insurance but you need to be very care full. You do not have to use the same company for all of your clients. Please be very wise!
For instance, watch your clients very carefully. Start with her /his behavior especially on the mobile phone. When you are interviewing him/ her and his or her mobile phone rings constantly and he / she responds, then straight away just know that his chances of answering a mobile phone while driving are very high. This behavior of talking with mobile phone while driving can cause accidents so be wise and use an alternative company for this application. This is all what is meant to reduce loss ratio.
Another sensitive thing you should note is that you should try and focus your marketing list to the married men with families for they often make accidents than the single men without families. Also young women tend to make fewer accidents than men of the same age, so in your marketing target the women. Make sure also you propose higher deductibles for your clients. Many accidents at times causes little destruction, you don’t need high deductibles. Through proposing for a higher deductible then you end up lowering premium amount which you may receive. But this is not bad at all because your potential payout keeps your loss ratio a bit lower.
However, make sure you include all clients’ information when writing the application. Don’t forget to ask about the driver who uses the car. It is advisable that you should take your time to know your clients very well. For instance, a good lady driver may have a crazy boyfriend who often drives the car. All the best and take care when doing the application!
To lower your loss ratio, make sure you check out very well where a certain individual lives, try to avoid marketing in areas which have the highest crime risks. An insurance agent like you is privileged because he knows the whole town very well, avoid such places! It is also advisable that you should choose different companies when quoting, if you notice any funny behavior with any of your client don’t dare to quote to the client companies who offer a bonus for any improved loss ratio. Am not saying you should not sell insurance but you need to be very care full. You do not have to use the same company for all of your clients. Please be very wise!
For instance, watch your clients very carefully. Start with her /his behavior especially on the mobile phone. When you are interviewing him/ her and his or her mobile phone rings constantly and he / she responds, then straight away just know that his chances of answering a mobile phone while driving are very high. This behavior of talking with mobile phone while driving can cause accidents so be wise and use an alternative company for this application. This is all what is meant to reduce loss ratio.
Another sensitive thing you should note is that you should try and focus your marketing list to the married men with families for they often make accidents than the single men without families. Also young women tend to make fewer accidents than men of the same age, so in your marketing target the women. Make sure also you propose higher deductibles for your clients. Many accidents at times causes little destruction, you don’t need high deductibles. Through proposing for a higher deductible then you end up lowering premium amount which you may receive. But this is not bad at all because your potential payout keeps your loss ratio a bit lower.
However, make sure you include all clients’ information when writing the application. Don’t forget to ask about the driver who uses the car. It is advisable that you should take your time to know your clients very well. For instance, a good lady driver may have a crazy boyfriend who often drives the car. All the best and take care when doing the application!
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