In my company's California personal auto program, we had larger than =
average loss ratios in the winter, which I could explain away to my =
superiors as being due to weather. But there was also a month or two in =
each of the last two summers (Jun-Aug) where there were higher than =
average loss ratios for liability and physical damage. I noticed in our =
homeowners program that the cause of loss with the largest number of =
claims in the summer is theft. That would explain a higher than average =
personal auto comp loss ratio. I assume the reason for higher than average =
p.a. liability and collision would be due to policyholders taking long =
road trips and getting into accidents.
Which leads me to my idea. I thought we could cross market with an airline =
to give discount tickets to our policyholders for use in June through =
August and for flights within the state or to immediately adjacent states =
(to cut down on 2-5 hour summer car trips that could lead to high-speed =
accidents and thus cut down on losses). I have two questions:
1. Where would the cost of the redeemed coupons fall in terms of ratemaking=
? General expenses?
2. Would regulators go for this?
By the way, I bounced the idea of one person in the company and he just =
said it was a wild idea and left it at that.
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