Auto insurance writers lost an estimated $16 billion of premium revenues in 2004 due to inaccuracies in rating information, according to a new study published by Quality Planning Corp. in San Francisco.
The figure represents an increase of $800 million over 2003, and about 9.8 percent of the $163 billion revenue recognized by personal auto insurance premiums industrywide.
QPC Chief Executive Officer Daniel Finnegan said that for the average auto insurer, each 1 percent of rating error losses translates into a 20 percent reduction in profitability.
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