On July 17, 2015, Robert Hartwig, president of the Insurance Information Institute, provided testimony at the National Conference of Insurance Legislators on price optimization in auto insurance markets. This PowerPoint report and associated written testimony, delivered at the conference, addresses the various issues surrounding price optimization in auto insurance markets and questions the recent controversy. The presentation begins with a standard definition, but adds that the meaning can vary from state to state, however. It also presents the idea that price optimization is not a new concept, is used widely in many or most markets, and in fact represents innovation in pricing models that ultimately benefits consumers, regulators and insurers. The testimony also makes clear that fact that the controversy over the use of price optimization has erupted despite the complete absence of any discernable or detectable disruptions in auto insurance markets, which remain extremely competitive and where rates adhere to the standard that they are not inadequate, excessive or unfairly discriminatory. The presentation also includes polling data on consumer attitudes on purchasing auto insurance. Almost two-thirds of those polled said that they compared prices for auto insurers at different companies, with lower-income respondents more likely to have comparison shopped.
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