Abstract:
A method of improving the loss ratio on a book of insurance including the use of a computer data base with a user interface display including questions for insured entities making up the book of insurance. Spaces are provided on the display for the input of answers from an insured. A survey is used to question the insured entity, the survey eliciting answers to the questions posed. Data is input from the answers received into the computer data base at the spaces provided for. The answers that are collected are compared with answers contained in written documents having information that was supplied by a third party insurance underwriter. Inconsistent answers are identified and the information obtained is reported to the underwriter who can determine whether or not the insurance premium of the insured should be adjusted.

Description:
CROSS-REFERENCE TO RELATED APPLICATIONS 
     This is a continuation of U.S. patent application Ser. No. 09/775,278, filed, Feb. 1, 2001, now U.S. Pat. No. 7,240,016 which application claims priority of U.S. Provisional Patent Application No. 60/178,972, filed Feb. 1, 2000. Both of these applications are incorporated herein by reference. 
     Priority of U.S. Provisional Patent Application No. 60/178,972, filed Feb. 1, 2000, is hereby claimed. 
    
    
     STATEMENT REGARDING FEDERALLY SPONSORED RESEARCH OR DEVELOPMENT 
     Not applicable 
     REFERENCE TO A “MICROFICHE APPENDIX” 
     Not applicable 
     BACKGROUND OF THE INVENTION 
     1. Field of the Invention 
     The present invention relates to a method and apparatus for improving the loss ratio on a book of insurance. More particularly, the present invention relates to a method and apparatus for improving the loss ratio on a book of insurance such as a worker&#39;s compensation, general liability, products liability, property, professional liability or the like. 
     2. General Background of the Invention 
     Traditionally, entities such as businesses purchase insurance from licensed insurance companies or underwriters through their insurance agent. Insurance agents typically have access to many insurance companies through their markets. The agent and the business seeking insurance typically complete a standardized application for insurance coverage (for example, that form provided by Accord). 
     The application is typically transmitted via fax or electronically to underwriters who then determine if the risk falls within the underwriters&#39; acceptable underwriting guidelines. If so, they determine a rate for one or more types of coverages, possibly with variable limits, and produce a quote and send it back to the agent. The agent then presents the quotes obtained from the market to his client (the business owner). 
     When the business owner and the agent decide to accept the quote, the agent binds coverage which in effect tells the underwriter that they accept the quote and would like coverage to begin on a certain date and time. The underwriter then produces a policy and sends it to the agent or business owner who is now the insured. The underwriter also produces an invoice and sends it to the agent or the insured. Usually with the invoice comes loss reporting instructions and other materials to assist the insured with being compliant with applicable laws. 
     During the policy period each insured enjoys the comfort of knowing that certain losses will be covered by the policy in exchange for conforming with the policy terms (paying the premium and acting in good faith). 
     With worker&#39;s compensation and general liability coverages, the premiums are determined by amount of payroll, by job classification, and by gross revenues. When applying for insurance for one year terms, these figures are typically estimated on the insurance application, and from those estimates, the underwriter&#39;s rates are applied and premium determined. After policy expiration, under the policy terms the underwriter has the right to audit the insured&#39;s actual payroll, gross sales, and/or proper classification to determine whether additional premium or refund is due. 
     While certain novel features of the invention shown and described below are pointed out in the annexed claims, the invention is not intended to be limited to the details specified, since a person of ordinary skill in the relevant art will understand that various omissions, modifications, substitutions and changes in the forms and details of the invention illustrated and in its operation may be made without departing in any way from the spirit of the present invention. No feature of the invention is critical or essential unless it is expressly stated as being “critical” or “essential.” 
     BRIEF SUMMARY OF THE INVENTION 
     On a particular book of insurance the underwriter hopes that the losses reported by its insureds do not exceed the underwriter&#39;s expectated loss ratio. The method of the present invention provides a method and apparatus for improving the loss ratio for a book of insurance including products liability, property, general liability, professional liability, workmen&#39;s compensation and other lines of business insurance. 
     In a preferred embodiment of the present invention the underwriter can use an audit survey provider to survey insureds in a book of insurance. The underwriter can electronically transmit to the audit service provider policy data captured by the underwriter&#39;s system for newly issued and also recently issued policies. The electronically transmitted data can contain relevant information about who the insured was, who the agent was, how the premium was derived, policy terms, along with other policy information. 
     In many large volume small premium books of insurance it is not practical for the underwriter to have each insured audited to detect improperly characterized risks. If an insurance carrier were to issue a large volume of insurance policies and subsequently utilize the system of the present invention as a means by which to independently verify insurance application information by surveying various insureds and determining the insurability of a risk, the method and apparatus of the present invention could be configured to assign a numeric value or flag to specific questions. Answers provided by insureds increasing the underwriter&#39;s exposure to covered losses would be assigned ranking points for that policy or flagged within the system until a final score was calculated or flagged for that insured and policy. Underwriters and other users of the present system would then be able to sort and analyze policies where the audit process has been completed in order to act first upon the policies with the most significant ranking scores or those policies flagged. Hence, after surveying a large volume of insureds, the underwriter need only take action on those which meet its definition of problematic (exceptional ranking scores) or those policies flagged. 
     The subsequent actions taken by the underwriter to resolve the issues raised by the survey should produce an improved loss ratio by identifying mistakes in characterizing risks. It is assumed that mistakes in defining risks are corrected by policy endorsement and insureds considered poor risks are canceled or not renewed, and over the long term, fewer losses are incurred by the underwriter. It is also assumed that opportunities to collect additional premium for additional exposures discovered by the survey process will be acted upon by the underwriter. 
     The underwriter may have very specific underwriting guidelines and criteria which include, for example, things like:
         Don&#39;t insure anyone in the snow plowing business;   Don&#39;t insure anyone who uses scaffolding rising above 25 feet;   Don&#39;t insure anyone who is in the roofing business (installation or repair);   Don&#39;t insure any business that has not been in existence and with stable ownership for more than three years.
 
Other examples of underwriting criteria can be payroll amounts, revenues, and worker figures not matching those specified in the application.
       

     In one embodiment numerical ranking criteria are derived from various underwriting guidelines and given specific numerical point values (for example, a negative 35 points for businesses not in existence for more than three years) approximating the relative importance of each criteria in relation to all other criteria. A numerical score can be calculated based upon the numerical point values assigned to each ranking criteria and then identifying which specific ranking criteria are applicable to an insured. 
     The present invention provides a method of using a computer system to survey various insureds asking questions and recording answers about the insured&#39;s business activities and history which can validate information sent by the underwriter to the audit survey provider. During the survey the insureds can also be coached on how to comply with basic regulations and loss prevention. During the survey, the audit survey provider records various elements of information that can later be used to identify the applicable ranking criteria and the system calculates a ranking score based on criteria point values assigned to the identified ranking criteria. After receiving the results of the survey, the underwriter can review the ranked insureds and determine whether additional premium is warranted, a policy endorsement is necessary, or even if the insured is deemed a risk violating underwriting guidelines—thus cancellation of the policy would be likely. 
     With the method of the present invention, policies that should have not have been issued because the risk did not meet applicable underwriting guidelines are readily discovered using the “management by exception.” Insureds receiving the most problematic numerical ranking scores or flags can be addressed first by the underwriter and insureds receiving numerical ranking scores considered satisfactory to the underwriter (or receiving no flags) need not be further reviewed. 
     Another embodiment of the present invention includes the method of obtaining information about an insured risk from an underwriter or the underwriter&#39;s designee, independently verifying that information, and simultaneously educating insureds about loss prevention and loss management techniques. 
    
    
     
       BRIEF DESCRIPTION OF THE DRAWINGS 
       For a further understanding of the nature, objects, and advantages of the present invention, reference should be had to the following detailed description, read in conjunction with the following drawings, wherein like reference numerals denote like elements and wherein: 
         FIG. 1  is a preferred embodiment of the present invention showing an user interface display for selecting an insured for surveying; 
         FIG. 2  is a preferred embodiment of the present invention showing an user interface display for selecting a policy for surveying and illustrating representative information for the policy which may be electronically transmitted from the underwriter to the audit survey provider; 
         FIG. 3  is a preferred embodiment of the present invention showing an user interface display illustrating information on the survey itself for the particular policy such as who was contacted and the number of unsuccessful survey attempts; 
         FIG. 4  is a preferred embodiment of the present invention showing an user interface display illustrating example points on which the insured being surveyed can be educated such as legal and loss reporting issues; 
         FIG. 5  is a preferred embodiment of the present invention showing an user interface display illustrating example inputs regarding business operations for numeral ranking criteria; 
         FIG. 6  is a preferred embodiment of the present invention showing an user interface display illustrating example inputs regarding personnel for numeral ranking criteria; 
         FIG. 7  is a preferred embodiment of the present invention showing an user interface display illustrating example inputs regarding occupational exposures for numeral ranking criteria; 
         FIG. 8  is a preferred embodiment of the present invention showing an user interface display illustrating a summary of the survey and including inputs for the audit survey provider&#39;s subjective opinion and relative ranking, and individual comments; 
         FIG. 9  is a preferred embodiment of the present invention showing an user interface display illustrating an example listing of specific ranking criteria identified in the telephone survey of the insured and the specific point values assigned to such criteria; 
         FIG. 10  shows an overall flow diagram illustrating the interaction between the insured, insurance agent, underwriter, and audit survey provider. 
         FIG. 11  is a preferred embodiment of the present invention showing an user interface display illustrating inquiries related to whether equipment used by insured is consistent with operations upon which premium was calculated. 
     
    
    
     DETAILED DESCRIPTION OF THE INVENTION 
     The method of the present invention provides an improved method for improving the loss ratio on a book of insurance and can be applied to worker&#39;s compensation, general liability, products liability, property, professional liability, and other lines of business insurance. In  FIG. 10 , an overall flow diagram is provided illustrating the interaction between the insured, insurance agent, underwriter, and audit survey provider in a preferred embodiment of the present invention. 
     Traditionally, entities such as businesses  20  purchase insurance from underwriters  22  through their insurance agents  21 . Insurance agents  21  typically have access many underwriters  22  through their markets. Typically, the agent  21  and the business entity  20  jointly complete an application for insurance coverage  100 . The application  100  is typically transmitted to several underwriters  22 , for example via fax or electronically, who then determine if the business entity  20  falls within the underwriter&#39;s  22  acceptable underwriting guidelines  200 . If so, the underwriters  22  determine a rate for one or more types of coverages, possibly with variable limits, and produce a quote and send it back to the agent  21 . The agent  21  then presents the various quotes to the business entity  20 . 
     When the business entity  20  decides to accept the quote of a particular underwriter  22 , the agent  21  binds coverage which in effect tells the underwriter  22  that the quote has been accepted and would like coverage to begin on a certain date and time. The underwriter  22  then produces a policy  110  and sends it to the agent  21  or business entity  20 . The business entity is now considered an insured  20 . The underwriter  22  also produces an invoice and sends it to the agent  21  or the insured  20 . 
     The above described process is repeated for numerous business entities  20  and agents  21  ultimately culminating in a book of insurance which is a set of policies for an underwriter  22  becoming effective during a certain time period. The underwriter  22  hopes that the losses reported by its insureds  20  on a particular book do not exceed the underwriter&#39;s expectation for loss ratio upon which the policy rates were based. The method of the present invention provides an improved method for improving this loss ratio by surveying underwriting ranking criteria  210 . 
     The underwriter  22  can send to the audit survey provider  23  a copy of the policy data electronically for policies issued during the set time period and captured by the underwriter&#39;s  22  system. The electronically transmitted information may contain relevant information about the various insureds in the book of insurance  120 , the agents  21 , how insurance premiums were derived, and terms of the policies  110 . The data is loaded into computer database system  24 . 
     Using the computer database system  24 , the audit survey provider  23  can perform a survey by telephoning the insured businesses  20  to learn more about their exposure and verify policy information  110 . During the telephone survey interview, the audit service provider  23  contacts the insured  20  by telephone and leaves a message, makes an appointment for a full interview, conducts full or partial interview, or marks a record to indicate the insured refused to participate in the interview. Each insured  20  is asked questions and the answers recorded about the insured&#39;s  20  business activities and history which would validate the information sent by the underwriter  22  to the audit survey provider  23  and identify various ranking criteria  210 . These findings are inputted into the computer database system  24  and can later be used to numerically rank  220  or flag each insured based on their responses to the questions. 
     During the interview, information known about the insured  20  is verified. The insured  20  is given information about posting requirements and claim reporting procedures. Information about the insured&#39;s  20  business operations and age of business can be obtained and recorded. A discussion of the types of employees and their pay rates can be determined and recorded. Specific occupational exposures are identified through discussions with the insured  20 . The audit survey provider  23  is able to give a subjective risk rating and make comments on his impression of the business operation. At conclusion, the computer database system  24  can generate a numerical score  220  of the risk that is consistent with identified ranking criteria  210 . During the survey  190  the insureds  20  can also be coached by the audit survey provider  23  on how to comply with basic regulations and loss prevention. 
     The results of the survey  190  are transmitted back to the underwriter  22  for appropriate action which may include endorsement, additional premium, or policy cancellation. After receiving the results of the survey  190  the underwriter  22  can review the ranked or flagged insureds  20  and determine whether additional premium is warranted, a policy endorsement necessary, or even if the insured  20  was deemed a risk violating underwriting guidelines  200 —thus cancellation of the policy would be likely. 
     The ranking criteria  210  are based on the underwriter&#39;s underwriting guidelines  200 . For the book of insurance  120  the underwriter  22  may have very specific underwriting guidelines  200  leading to ranking criteria  210  which include, for example, things like:
         Don&#39;t insure anyone in the snow plowing business;   Don&#39;t insure anyone who uses scaffolding hat rises above 25 feet;   Don&#39;t insure anyone who is in the roofing business (installation or repair);   Don&#39;t insure any business that has not been in existence and with stable ownership for more than three years.
 
Other examples of ranking criteria  210  can be payroll amounts and employee numbers not matching the underwriter&#39;s  22  records for the specific insured entity  20 .
       

     In a preferred embodiment of the present invention various ranking criteria  210  can each be given specific criteria point values  215  (for example, a negative 35 points for businesses not in existence for more than three years) approximating the relative importance of each ranking criteria  210  in relation to all other ranking criteria. A numerical score  220  can be calculated based on the criteria point values  215  assigned to each ranking criteria  210  and then identifying which specific ranking criteria  210  are applicable to the insured  20 . Numerically ranking each insured  20  or flagging insureds  20  for identified ranking criteria  210  enables a user to uncover insureds  20  with exposures inadequately or not at all defined and thus additional premium warranted. 
     Insurance policies  110  that should have not been issued, such as when the survey found the risk did not meet applicable underwriting guidelines  200  are readily discovered using the numerically ranked or flagged insureds  20  through “management by exception.” Insureds  20  receiving the most problematic numerical ranking scores  220  can be addressed first by the underwriter  22 . Insureds  20  receiving numerical ranking scores  220  considered satisfactory to the underwriter  22  or no flags need not be further reviewed. 
     Built in management reports and the ability to extract information from the computer database system  24  allows the underwriter  22  to efficiently deal with poor scoring insureds  20 . 
       FIGS. 1 through 9 , and  11  show a preferred embodiment using a computer database system  24  for prompting, organizing, recording, and analyzing the questions asked and responses recorded during the survey  190 . Once the numerical ranking criteria  210  are defined based on the underwriter&#39;s underwriting guidelines  200  and relative criteria point values  215  assigned to each ranking criteria  210 , one skilled in the art can program a computer database system  24  to prompt the audit survey provider  23  to solicit responses related to the ranking criteria  210 , record insureds&#39; 20 responses, calculate the numerical ranking score  220  of each insured  20  surveyed (or flagging particular insureds), and report the survey results  230 . 
     In programming the computer database system  24 , any object oriented programming language can be used, for example C, Java, Access, and Visual Basic. Database programs, for example D-Base, can also be used. Furthermore, spreadsheet programs such as Lotus  123  and Excel could also be used. Other programming languages can also be used. In creating the specific database program, prompting messages can be provided, along with spaces for survey  190  input, and algorithms for performing various survey comparisons, for example calculating disparities between payroll listed on an insured&#39;s  20  application and that stated in the survey  190 , along with calculating each insured&#39;s  20  numerical ranking scores  220  could also be included. Various reporting functions can also be included, for example numerically listing the insureds  20  by ascending or descending numerical ranking score  220  (or listing insureds flagged) or coming over or below specified numerical ranking scores  220 , along with reporting functions on one or more ranking criteria  210 , such as payroll discrepancies. 
       FIG. 1  is a preferred embodiment of the present invention showing an user interface display  11  for selecting an insured  20  for the survey  190 . Insureds  20  surveyed are selected from the book of insurance supplied by the underwriter  22  to the audit survey provider  23 . The audit survey provider  23  simply picks an insured  20  from the computer database system  24 . 
       FIG. 2  is a preferred embodiment of the present invention showing an user interface display  12  for selecting an insured&#39;s  20  policy  110  to be surveyed  190  and illustrating representative information for the policy  110  which may be electronically transmitted from the underwriter  22  to the audit survey provider  23 . In  FIG. 2  the survey process is initiated with display  12  wherein the audit survey provider  23  inputs or has data displayed in the form of the insured&#39;s  20  identity, including name, contact person and telephone, the agent&#39;s information, including the agent&#39;s  21  name and address and FEIN number, telephone and facsimile number as well as the policy  110  information, including policy number, estimated premium, and effective dates. Other related survey  190  information can be added to the display in  FIG. 2 . 
       FIG. 3  is a preferred embodiment of the present invention showing an user interface display  13  illustrating information on the survey  190  itself for the particular policy  110  such as who was contacted in the survey  190  and the number of unsuccessful attempts at performing the survey  190 . This figure includes input for the start date of the survey  190 , the number of unsuccessful survey  190  attempts, and the completion date. 
     This information is useful in setting limits on the number of attempts and period of time before the insured  20  will be listed as an unsuccessful survey participant. This figure also provides an overall screen to indicate when the survey  190  has started, contact information, and includes folders A-H that including: (a) survey information; (b) WC legal issues; (c) operations; (d) equipment; (e) personnel; (f) occupational exposures; (g) evaluation; and (h) penalty detail. 
       FIG. 4  is a preferred embodiment of the present invention showing an user interface display  14  illustrating example points on which the insured  20  being surveyed can be educated such as on legal and loss reporting issues. Educating the insured  20  on legal requirements and loss reporting can also reduce the loss ratio for the underwriter  22  by improving compliance on such issues. In  FIG. 14  the insured  20  is asked questions about placement of worker&#39;s compensation notices and requirements and the name of the individual responsible for reporting claims and duties in reporting. 
       FIG. 5  is a preferred embodiment of the present invention showing an user interface display  15  illustrating example inputs regarding operations; the total years in business; estimates for the total annual revenues; whether the insured  20  uses subcontractors; if so used, inputting specific listings of subcontractor&#39;s work descriptions; estimates of annual dollar amounts; and whether the insured  20  obtains certificates of insurance from each such subcontractor. If no certificate of insurance is obtained from a particular subcontractor, that subcontractor can be automatically included in the calculation for the overall annual payroll for the insured  20  in calculating payroll discrepancies. Also inputted is whether the work description for the subcontractor is an area approved by the underwriter  22  in its underwriting guidelines  200 . If a non-approved work description is found a criteria point value  215  for such finding can also be applied to the insured&#39;s  20  numerical ranking score  220 . 
       FIG. 6  is a preferred embodiment of the present invention showing an user interface display  16  illustrating example inputs regarding personnel. Inputted are the number of full time and part time employees, employee turnover rating; whether casual labor is used; and, if so, estimating the numbers of days per year casual labor is used; estimating the frequency labor is obtained from temporary agencies; and whether proofs of insurance are obtained by insured  20  for this temporary labor. A job description for each employee is obtained and the audit survey provider  23  classifies such employees under state insurance classification codes such as those promulgated by the National Council on Workers Compensation Insurance and adopted by states. An estimate of the payroll for each employee is inputted. Also inputted is whether the classification is one approved by the underwriter  22  in its underwriting guidelines  200 . If a non-approved work description is identified, a criteria point value  215  for same can also be applied to the insured&#39;s  20  numerical ranking score  220 . 
       FIG. 7  is a preferred embodiment of the present invention showing an user interface display  17  illustrating example inputs regarding occupational exposures. Inputted are special exposures such as work in confined spaces; work in elevated areas at a specified maximum height; work below ground at a specified maximum depth; whether work is performed above water; whether work is performed in the areas of asbestos removal; work in lead paint removal; and work in handling of hazardous waste. Also inputted is whether work is performed in the areas of roof repair or replacement; demolition or blasting; using lifting devices; or snowplowing on public roads. Also inputted is whether the insured  20  performs non-home state work, a listing of the states worked in, and an estimate of whether this work exceeds a specified number of consecutive days on an annual basis. 
       FIG. 8  is a preferred embodiment of the present invention showing an user interface display  18  illustrating a summary of the survey  190  and including inputs for the audit survey provider&#39;s  23  subjective opinion and relative position of the insured  20 , and individual comments. The audit survey provider  23  inputs his subjective evaluation, either good, fair or poor along with a relative comparison to other companies similarly situated, either above average, average, or below average. The audit survey provider  23  can also input specific comments about the insured  20 . Also inputted is whether the insured  20  refused to answer questions in the areas of: (a) the whole survey; (b) legal issues; (c) operations; (d) equipment; (e) personnel; and (f) occupational issues. The status of the survey  190  appears in this figure. 
       FIG. 9  is a preferred embodiment of the present invention showing an user interface display  19  illustrating an example listing of the criteria flagged in the survey  190  and the specific criteria point values  215  assigned to such criteria. Identified or flagged ranking criteria  210  are listed for the insured  20  surveyed along with the specific criteria point values  215  assigned to each flagged ranking criteria  210 . 
       FIG. 11  is a preferred embodiment of the present invention showing an user interface display  19 A illustrating inquiries related to whether equipment found in the survey is consistent with the classification codes applied to the insured  20  for determining premium. If inconsistent equipment is found the audit survey provider  23  can input specific comments into the “additional comments” box shown in  FIG. 8  which can be reported to the underwriter  22 . 
     In another embodiment, trends regarding insurance agents  21  failing to accurately complete insurance applications can be investigated. For example, the survey  190  could identify, for each insured  20 , the applicability of specific ranking criteria  210  (such as inaccurate payroll estimates, numbers of employees, and/or insureds being in business for less than three years). Insureds  20  having identified ranking criteria  210  would have ranking scores  220  impacted by criteria point values  215  assigned to the identified criteria  210 . The calculated scores  220  could then be reported on an insurance agent-by-insurance agent  21  basis. Insurance agents  21  found to have insureds  20  with consistently problematic numerical ranking scores  220  or flags could be further investigated to determine if the agents  21  were inaccurately submitting information. If so found, future applications from problem insurance agents  21  could be rejected. 
     Another embodiment of the present invention includes auditing the insured  20  after a policy  110  has expired to determine that the exposure used for premium calculation was properly applied to the insured  20 . The insured  20  can be audited to determine if additional premium or refund is due based on an under/over-estimation of payroll or sales on the application. The audit survey provider  23  can, on behalf of the underwriter  22 , mail out a questionnaire requesting information and supporting documentation upon which premium was determined, such as actual payroll or gross sales. After receiving the completed questionnaire and supporting documentation, the audit survey provider (now auditor)  23  conducts an audit also using the information obtained from the earlier survey  190 . The audit may require telephoning the insured  20  to clarify facts or determine why inconsistencies exist between the completed questionnaire, submitted documentation, and the information recorded in the survey  190 . The results of the audit can be electronically transmitted to the underwriter  22  to assist it in calculating additional premium or a return premium. 
       FIG. 10  shows an overall flow diagram illustrating the interaction the insured, insurance agent, underwriter, and audit survey provider. Arrow  300  represents interaction between business entity  20  and insurance agent  21  are represented. Business entity  20  can be seeking insurance coverage(s) and insurance advice through and from agent  20 . Arrow  310  represents the application being submitted for an insurance quote to an underwriter, insurance company, underwriting organization, or managing general agency  22 . In the application for insurance quote key information is provided about the business entity  20  and the practices of the exposure for the business entity. If the business entity  20  fits the underwriter&#39;s  22  acceptable underwriting guidelines  200 , information is used to develop a quote which includes rates and an estimated premium. Arrow  320  represents the transmittal of this quote to the insurance agent  21 . Arrow  330  represents the transmittal of this quote from the insurance agent  21  to the business entity  20 . Arrow  340  represents notification by the business entity  20  to the agent  21  that the quote is accepted. Arrow  350  represents agent  21  notifying insurer or underwriter  22  to bind insurance coverage. Arrow  360  represents insurer or underwriter  22  sending policy  110  and premium invoice to the agent  21  or insured business entity  20 . Arrow  370  represents the underwriter  22  sending to the audit survey provider  23  a copy of the policy data electronically. Arrow  380  represents the audit survey provider  23  loading the policy data information into a computer database system  24 . Arrow  390  represents the audit survey provider  23  using the computer database system  24 , to perform a survey by telephoning the insured business  20  to learn more about exposure, verify information, providing loss control recommendations and answers and recording findings in the computer database system  24 . Arrow  400  represents the audit survey provider electronically submitting the results to the insurer or underwriter  22  and such information being inputted into the underwriter&#39;s  22  computer database system  24 A. Arrow  410  represents the audit survey provider  23  being contracted to contact the insured business  20  after policy insurance policy  110  termination to conduct a premium audit  195  to determine if the actual premium (derived by business payroll and/or sales) is different from estimated premium. 
     The following is a list of reference numerals used in the specification: 
     
       
         
               
             
               
               
               
             
           
               
                   
               
               
                 PARTS LIST FOR REFERENCE NUMERALS 
               
             
          
           
               
                   
                 (Part No.) 
                 (Description) 
               
               
                   
                   
               
               
                   
                  10 
                 improved method of improving loss ratio on a  
               
               
                   
                   
                 book of insurance 
               
               
                   
                  11 
                 input display 
               
               
                   
                  12 
                 input display 
               
               
                   
                  13 
                 input display 
               
               
                   
                  14 
                 input display 
               
               
                   
                  15 
                 input display 
               
               
                   
                  16 
                 input display 
               
               
                   
                  17 
                 input display 
               
               
                   
                  18 
                 input display 
               
               
                   
                  19 
                 input display 
               
               
                   
                  19A 
                 input display 
               
               
                   
                  20 
                 insured or business entity 
               
               
                   
                  21 
                 insurance agent 
               
               
                   
                  22 
                 underwriter or insurance company 
               
               
                   
                  23 
                 audit survey provider 
               
               
                   
                  24 
                 audit expert database 
               
               
                   
                 100 
                 application for insurance coverage 
               
               
                   
                 110 
                 insurance policy 
               
               
                   
                 120 
                 book of insurance 
               
               
                   
                 190 
                 survey 
               
               
                   
                 195 
                 premium audit 
               
               
                   
                 200 
                 underwriting guidelines 
               
               
                   
                 210 
                 ranking criteria 
               
               
                   
                 215 
                 criteria point value 
               
               
                   
                 220 
                 numerical ranking score 
               
               
                   
                 230 
                 reporting survey results 
               
               
                   
                   
               
             
          
         
       
     
     The foregoing embodiments are presented by way of example only. Without further analysis, the foregoing will so fully reveal the gist of the present invention that others can, by applying current knowledge, readily adapt it for various applications without omitting features that, from the standpoint of prior art, fairly constitute essential characteristics of the generic or specific aspects of this invention set forth in the appended claims.