True. "More Efficient Rating Plans can allow the insurer to grow more healthily, rather than growing by taking on risks that no on else wants."
What are the advantage of having a more efficient rating for an insurer?
When an insurer has a more efficient rating plan, they become accurate price for the risk they are takng on. This will ultimately contribute to healthier growth for the company.
This is because they can avoid underpricing policies for high-risk clients, which can lead to losses, and overpricing policies for low-risk clients, which can lead to a loss of competitive advantage.
By growing with a balanced portfolio of risks, an insurer can maintain profitability and stability. Taking on risks that no one else wants without adequate pricing can lead to excessive claims and financial instability for the insurer.