2015.Spring 8a.
One of the advantages listed in the BattleCard answer is "Convenience to insured (don't have to apply to ARP)". This should read "(don't have to apply like one would have to for ARP)"
Also, another advantage is "better service (insureds may be treated differently in ARPs)". Does this imply that the insurers who are servicing claims in a Reinsurance Facility don't know which drivers are part of the Reinsurance Facility?
Comments
1) We'll take note of this. Thanks.
2) The clincher is that ARP assigns particular high-risk insureds to particular companies, whereas RF shares the results among market participants. The ARP business of a company is likely to perform badly, even with higher rating. Knowing this, the company may have an incentive to withdraw resources from its ARP business. This is not an issue with RF, where high risk is centrally pooled, and the results shared among all.
I've adjusted the Battle Card for 2015.Spring 8a. Thanks!