SAN FRANCISCO--Quality Planning Corporation (QPC), the Rating Integrity Solutions Company, today released its annual Premium Rating Error report. The report concludes that premium rating errors lower the overall profits of auto insurance companies. QPC estimates that $15.2 billion of premium revenues were foregone in 2003 due to inaccuracies in rating information. The report can be found online at: http://www.qualityplanning.com/research.html.
To put this $15.2 billion premium rating error into perspective, it represents about 9.7% of the $157 billion revenue recognized by personal auto insurance premiums industry-wide. Dr. Daniel Finnegan, founder and CEO of QPC, noted: "Our research shows that if an auto insurance company can cut its rating error by fifty percent, it is likely that the company can more than double its profits."
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