Assessing fairness in insurance
Regulatory requirements are designed to protect consumers while ensuring that insurance pricing is appropriately aligned with risk.
As the use of predictive models and similar automated tools increases, coupled with a heightened focus on diversity, equity, and inclusion, historical practices designed to safeguard against unfairly discriminatory outcomes may not be sufficient.
As a leading strategic data analytics and technology partner, Verisk has developed a solution designed to help insurers test their personal lines models and variables to respond to current and future regulations. FairCheck comprises a customizable, scalable methodology and consultative service to help assess and mitigate the potential for unfairly discriminatory outcomes, including in advance of regulatory filings.
With its proven methodology and team of experts in government relations, actuarial science, data science and analytics, Verisk is equipped to help support impartial underwriting outcomes that can benefit insurers, regulators and consumers alike.
Mitigating unfairly discriminatory outcomes
Verisk’s FairCheck can help insurers:
- Evaluate predictive models, external consumer data, algorithms, and variables,
- Customize thresholds between models and variables to help respond to individual state requirements,
- Segment by different geographies (national, regional, state, etc.),
- Assess various components of insurance, including loss costs, claims costs, expenses, and premiums, and
- Mitigate potential unfairly discriminatory outcomes before filing for regulatory approval.
Download our white paper to learn more about:
- Verisk’s unique and proprietary methodology developed to test a nationally representative personal auto rating model,
- What impact, if any, race has on the rating model, and
- Any potential contributions to loss costs among five areas of coverage: collision, comprehensive, bodily injury liability, property damage, and personal injury protection.