Risk Profiles
Insurance actuaries are used by Insurance Companies to draw up risk profiles for their prospective customers, placing them into specific categories. In car insurance categories will be based on various factors, such as gender, age, profession or the type of car. Vintage or collectable cars will not fall into the same category as private cars.
Insurance companies utilise a number of sources to accurately establish the risk profile such as: proposals; quotations; surveys; market intelligence; competitor information; worldwide trends; reports from the news media and their own statistics on past claims, amounts and the claims behaviour.
The insurance company will ask many questions to establish an accurate risk profile for a car insurance client. Some questions are material to the risk (such as the car itself) and others affect the rating structure (such as age and gender.) The following information will be required for car insurance: age; gender; marital status; employment record; residential address; details of the car including the make, model and value; past claims record, other drivers, private or business use and details of risk protectors such as alarms.
All this information is used to draw up the risk profile that will determine the insurance premium. Risk profiles can indicate low, medium and high risk. An insurer may even decide that the risk is too high and refuse to offer insurance.