UNIVERSITY OF ILLINOIS AT URBANA-CHAMPAIGN

College of Business

D E P A R T M E N T O F F I N A N C E

Finance 230 Quotation Project

Fall, 2007 Due: October 12, 2007

The purpose of this assignment is to show you how much insurance rates vary by company, how much you can save by shopping for insurance, what some of the important factors are in buying insurance and approximately how much it would cost for you to buy insurance. For this project you are to use the Internet to obtain quotations for auto and life insurance.

Some insurance companies want to run credit checks on applicants for insurance. If you do not want them to do this, then do not grant permission. They may decline to provide you with a quote, but you should be able to find other insurers that will provide quotes without running a credit check. It would be helpful if you put a note on your assignment indicating any companies that insisted on credit checks so we can alert other students.

For each type of coverage, obtain quotations from at least FIVE different companies. You should include State Farm and Allstate among the companies you research for auto insurance quotes and State Farm among the companies you research for life insurance quotes. The rest of the companies are open to your discretion. This is not meant to be an endorsement in any way of State Farm or Allstate, but rather a means to ensure that you have among your list of companies a few that will have most of the categories of information available.

List the financial ratings from A. M. Best, Standard and Poor’s, Fitch, Moody's and Weiss (if they are rated) on each company. Also, if available, list the Illinois Complaint Ratios for the company for the appropriate policies. You can obtain the complaint ratios from the Illinois Division of Insurance (http://www.idfpr.com/DOI/Complaints/ComplaintRatioLinks06.asp). Since the rates are intended to reflect what you would pay for insurance, you should not copy someone else's information. You may use the Insure.com site or another web site that provides multiple quotes for insurance or from an individual company’s website. Ins.Web.com has asked that we not use their website as they sell the information you provide to local agents who then will contact you. They do not want to waste the agents’ time on students using the internet for a class.

For life insurance, obtain a quotation on $200,000 in term life coverage for yourself. Select whatever initial rate guarantee period you want. Note that the financial ratings included on the insure.com site when obtaining a life insurance quote apply only to life insurance companies included in the group, not to the auto insurance companies.

For auto insurance, use an internet site that provides multiple auto insurance quotes, or obtain them directly from insurance company websites (such as Allstate, Progressive or State Farm). If you use a site that provides personalized quotations, list the rating information that is correct for your situation.

Find the ratings for the property-liability companies for the auto quotations. The Illinois Division of Insurance provides helpful information about how to obtain ratings at: http://www.idfpr.com/DOI/General/find_reputable.asp

The ratings from Standard and Poor’s and Fitch are available on the Internet site: http://www.insure.com/ratings/index.html (or link through the course web site). You do not need a username and password for this site. Just type the company’s name in the search box and choose an issuer search. Moody’s ratings are available at http://www.moodys.com. A.M Best ratings are available at http://www.ambest.com. (However, you must register and obtain a password before you will be able to receive quotes). The A. M. Best ratings are available in the Commerce Library if you decide not to register with the A.M Best website. Weiss ratings are available online but only if purchased with a credit card for $15 each. NOTE: You are not required or expected to purchase any quotes online from Weiss or any other ratings company. However, if you choose a very large company, such as State Farm, all the ratings for that company, including Weiss, should be listed on that company’s web site.

If you find any additional sites that provide useful information about insurance, please include them with your assignment.

This project must be in the form of a table or speadsheet. See example below. We will not accept printouts from the internet. Your project should not be longer than two pages.

When you turn in this assignment, also turn in a scantron that is coded with your name and net id for us to use when recording your grade. DO NOT STAPLE the scantron to your project. Please use a paper clip or other means so we can remove the scantron without damaging it.

Example Project Note: The quotes, ratings, and ratios used here are not correct.

FIN 230 Insurance Quotation Project - 10/12/2007
Auto Insurance
Sources of information on rates:
www.statefarm.com
www.allstate.com
Quotes based on 21 year old male
driver living in Champaign, IL / 6 month / RATINGS: / Illinois Complaint
Company: / premium / A.M. Best / S&P / Fitch / Moody's / Weiss / Ratios
Almost Insurance Co. / $921 / Z+ / DD / Aa2 / B / B+ / 0.65
Freedom Mutual / $1,037 / V+ / TT / A / C / n/a / 0.68
NationMutual / $859 / X+ / ST / AA / D / n/a / 1.00
Peking Insurance Co. / $1,707 / T+ / Bq / B / B / n/a / n/a
Nation Farm Mutual Auto Ins. / $849 / W++ / VVV / B- / E / A / 0.32
Term Life Insurance
Sources of information on rates:
www.insure.com
Insured is male, 21 years old
nonsmoker / $200,000 policy / RATINGS: / Illinois Complaint
Company: / premium / A.M. Best / S&P / Fitch / Moody's / Weiss / Ratios
Italy Life Insurance Co. / $232 / LAg / K+ / AA / B / Aaa / n/a
Phony Life Insurance Co. / $200 / G+g / RR / AA+ / C / Bcc / n/a
John Smith Mutual / $176 / H++gu / PP+ / AAA / D / Dcc / 1.37
World Life Insurance Co. / $179 / Y / W+ / AA- / B / Z / n/a
State All Life Ins. Co. / $165 / Np / EE- / AA / E / F / 1.05