Liga Asuransi – Determining insurance premiums is a process that involves various factors and in-depth analysis. One of the main components in this process is underwriting, namely the risk assessment carried out by insurance companies on prospective customers. In a YouTube video entitled “The Secret Behind Determining Insurance Premium Prices? Underwriting Information is the Key”, Mr Taufik Arifin, CEO of L&G Insurance Broker, explains in detail how the underwriting process plays a role in determining insurance premium prices.
What is Underwriting?
Underwriting is an evaluation process carried out by insurance companies to assess the risks associated with prospective customers or objects to be insured. The main goal of underwriting is to determine whether the insurance company is willing to accept the risk and, if so, how much premium the customer must pay. In this video, Mr. Taufik explained that underwriting is the key to ensuring a balance between the risks borne by the company and the benefits provided to customers.
Factors Considered in Underwriting
Mr. Taufik explained that the underwriting process includes analysis of various factors, including:
- Prospective Customer Profile: Personal information such as age, gender, health condition, occupation and lifestyle.
- Type of Insurance: Each insurance product has different risk assessment criteria, for example, life insurance focuses more on health, while property insurance pays attention to location and potential disasters.
- Claim History: Customers with a high claim history are considered more at risk.
- Environmental Conditions: For property or vehicle insurance, geographic location is an important consideration.
Proses Underwriting
In this video, Mr. Taufik outlined the main stages in underwriting, namely:
- Information Collection: Prospective customer data is collected through an application form.
- Data analysis: Information is analyzed by underwriters using statistical models to assess risk.
- Decision Determination: The underwriter decides whether the risk is acceptable and determines the appropriate premium.
- Communication with Customers: Decision results and premium details are conveyed to prospective customers.
The Importance of Underwriting in Determining Premiums
Mr. Taufik emphasized that effective underwriting allows insurance companies to set premiums that reflect the true level of risk. This is important so that the company remains financially sustainable while providing competitive and fair premiums for customers.
On the other hand, if underwriting is not carried out carefully, the insurance company could face the risk of losses due to premiums that are too low or lose potential customers because premiums are too high.
Technology and Innovation in Underwriting
In the video, Mr. Taufik also discussed how modern technology, such as big data And artificial intelligence (AI), simplifying the underwriting process. This technology allows:
- More Accurate Risk Predictions: More detailed data allows companies to make risk predictions with a higher degree of accuracy.
- Process Automation: With a sophisticated system, the underwriting process becomes faster, so customers receive decisions more efficiently.
- Premium Personalization: In-depth data allows companies to offer more specific and fair premiums for each customer.
Challenges in the Underwriting Process
Even though technology provides convenience, Mr. Taufik also highlighted the challenges faced by insurance companies in the underwriting process, such as:
- Data Confidentiality: Maintaining customer privacy is a major challenge in the digital era.
- Regulatory Changes: Companies must continue to adjust the underwriting process according to applicable regulations.
- Changes in Consumer Behavior: Consumer expectations that continue to change force companies to continue to innovate.
Conclusion
Explanation from Mr. Taufik Arifin in this video provides invaluable insight into the importance of underwriting in determining insurance premiums. This process ensures that premiums reflect the true level of risk, while helping companies maintain a balance between customer benefits and business sustainability.
In addition, technological innovation has pushed the underwriting process to become faster, more accurate and efficient, although there are still challenges that must be faced. By understanding the underwriting mechanism, potential customers can better appreciate the complexity of determining insurance premium prices.
For further information, watch the full explanation directly by Mr. Taufik Arifin in the following video: The Secret Behind Determining Insurance Premium Prices? Underwriting Information Is Key.
For all your insurance needs, Contact L&G Insurance Brokers Today!
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