Answers - Insurance

Insurance companies are just like any other business in that they are out to make a profit. In any business, a company must correctly price its products in order to make a profit and many diff

According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product

erent methods are used to come up with a fair price.

The process of underwriting is simply the insurance company’s way of “evaluating” a risk so that it can set a reasonable price and make a

; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.

Examples of combination products may in

profit from selling a policy. The days of using an applicant’s driving record, accident history, age and geographic location as the only underwriting tools are gone. They have been replaced by

lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.

extremely complicated tiered rating plans that base your rate on a variety of factors that make up your insurance score. This is a complicated algorithm that takes into account many factors

here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe

but typically your credit rating closely parallels your insurance score. This means that if you have a good credit score, you are very likely to have good insurance score and therefore a lower

d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.

Combination pro

insurance rate. The theory is that groups with good credit will have fewer claims than similar groups with bad credit. The good credit group is considered to act more responsible and that beh

ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc

avior should translate to their driving habits. The insurers have credible data to back this up and insurance departments across the country now generally accept insurance scoring as a viable

easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi

ating tool. All of the factors that go into your insurance score are generally a closely held trade secret. It is difficult at best to get an insurer to tell you exactly how this score is calc

nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically

ulated as even the company’s own insurance agents don’t typically have this knowledge. Here is the formula that you need to know: a good credit score = a good insurance score = a lower car i

and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ

nsurance rate.

For example: two different risks that are next door neighbors of the exact same age, living on the same street, driving the exact same cars, and having the exact same driving r

ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi

ecords….would expect to pay a similar, if not the same, rate. However, this is highly unlikely with the new tiered rating plans, where often, a hundred or more rates could apply for what seems

ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.

Following aspects would a

like the same risk. This is primarily because of their insurance score. If one of the neighbors has a bad credit score, they would likely to pay a significantly higher rate, possibly even dou

dd to the challenges in developing combination products:

Which markets to tap where the combination products can do fairly well?
Which combination prod

ble, as the credit score will often parallel the insurance score. Remember the formula shown above. In fact, today, to get an accurate car insurance quote, at some point you generally must giv

cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin

e your social security number so an insurance score/credit check can be done. Then and only then do you get the true rate.

Using credit as a rating tool is a hot topic in the industry and man

tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen

insurers are facing opposition from various groups across the country. These groups view this practice as unfair to the lower income populations because they typically have lower credit score

t?

As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel

s or no credit at all. Bad credit translates to a bad insurance score for this group, thus a higher rate for this population. Is this fair? The legality of using credit or an insurance score a

ping new procedures for reviewing their safety, efficacy and quality.

Professional from academic institutions, pharmaceutical industries, health care indust

s a rating tool is currently being challenged in many states and the outcome will play out in courtrooms across the country. Stay tuned…..

For now and the near future, it looks like insurance

y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products

scoring is here to stay. In order to get the best possible advice on these very complicated tiered rating schemes used by most of the major car insurance companies, I would recommend calling

.

As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de

and insurance agent to get a rate quote. There are many things about these new rating plans that can be explained in simple language that you can understand. An agent has a vested interest in

elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.

Companies that provide selfless information through particip

you, the client, and would like to get to know you by name.

Regards,

Larry Ninerell

President of FindMyBestAgent.com

Insurance Agency Owner

Insurance Industry Insider for the last 20 year

tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products

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Answers - Car Insurance and Your Insurance Score - Or Is It Your Credit Score?

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