More than 300 other companies have been steadily increasing their own presence. It's a dynamic market. At one point, there were as many new players coming in as there were companies being consolidated out, he said. Nonstandard drivers generally have a history of accidents or traffic tickets, so they're willing to pay higher premiums. But, because there are so many players in the market, premiums can't go too high.
Independent agents have too many companies willing to take the risk.
So the challenge becomes how to offer an attractive premium that still corresponds to the higher risk. Nonstandard writers have therefore constantly retooled their approach, trying to gather as much data as possible to accurately assess the risk. In addition to basic driving history, nonstandard insurers have concentrated on such other areas as average daily mileage, a driver's annual income, and more controversial variables like credit scoring and geographic location. While profitability shows signs of flattening in nonstandard, it's been an area of tremendous growth for companies. The company's success in nonstandard has helped the standard and preferred business as well.