Is it parked in safe places and parked in a garage at night?

These are just some of the things that are considered. Any of these factors may increase the chances of a loss. Marketing is essential to gaining new customers. In fact, in our extremely competitive market, this is a must - a core competency. By employing more sophisticated modeling techniques in both auto and homeowners insurance, we are trying to charge the right rate for the right risk. In the old days, companies used broad categories to classify risk, with few real distinctions between the categories or the prices charged for the exposure. Although we use large groups of similar risks to set rates, our goal is to determine and charge the most accurate rate for the individual risk profile. A more accurate risk profile enables us to rate each risk more fairly. These factors can often help build a better picture of the individual's attributes and the true nature of the risk that he or she present. Therefore, we participate in numerous associations that offer practical information. We want to make sure we are engaged, not just in getting people to buy insurance, but also in understanding the role of insurance and in communicating important insurance issues. We also have to make sure our story is told in the media. We, like other insurance companies, fund the organization so it can research automobile safety and educate people on such issues as teen driving safety, airbag safety, child safety seats and many others. That's why we support such organizations as the Insurance Institute for Highway Safety, which is dedicated to reducing deaths, injuries and property damage on the nation's highways.

We want to be a part of the community. In our organization, we believe we have to be good citizens in the states, cities and communities in which we sell insurance. Effective marketing includes building a positive image in the community. You have to have a value system upon which your credibility in the marketplace is based.

Marketing begins with reputation. In some lines of insurance, particularly private passenger auto and homeowners, risk-scoring methods that take factors such as personal responsibility into account have recently come into wide usage. We use the data to build our pricing model. We have extensive computer systems that aggregate an enormous amount of data on claims, claims payments, our own customers and even demographics of the general population. In this process, we must also consider each state's individual pricing regulations.

We then take the data of similar risks and try to determine a cost. That value has to be based on fact. We gather as many facts as we legally can in forming a picture of the potential risk to help us analyze the exposure and assign a value to it.