Problems of Rating Organizations

The present movement toward experimentation, flexibility and diversity in rating systems in the casualty insurance field raises a question as to the future status of casualty rating organizations. Traditionally, these organizations have been leaders in their fields with rating systems designed to meet the needs of their affiliated companies with what has been considered to be sufficient latitude within those rating systems to place their members and subscribers in a position to compete among themselves, as well as to compete with non-bureau companies. This concept of bureau operation, with basic manual rates being based upon a broad spread of compatible statistics, is taking on an entirely new complexion. The advent of the agency filing system promoted from within rating organizations, particularly in relation to automobile liability insurance; the construction currently being placed upon the deviation section of the casualty rate regulatory laws in some quarters; and the ever-growing desire on the part of individual companies enrolled in rating organizations to experiment, is bringing about a complete change in the position, from the standpoint of ratemaking, which rating organizations hold in the industry.