Rules-based underwriting systems are designed to reflect the logic of the best and most experienced underwriters. In this way, they can provide agents and customer service representatives with the appropriate questions to ask applicants, and enable the company to more accurately and efficiently assess risk. But what if the data the applicant provides is wrong?"The problem with technologies such as rules-based systems or efforts to streamline information flow to agents is the matter of the quality of the information," says Daniel Finnegan, Ph.D., and president and founder of Quality Planning Corp. (QPC), San Francisco. "You can make all the rules you want, but if you don't get the data right, the outcome is wrong."

QPC analyzes auto insurers' books of business for rating errors-and also provides a call-center service to obtain the correct information from policyholders. QPC's proprietary method, called RISK:check, applies more than 100 audit checks to rating factors, including commute distance, annual mileage, vehicle garaging territory, unlisted drivers, business use and marital status.

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