ARLINGTON, Va.–(BUSINESS WIRE)–Two new research reports designed to guide the insurance industry toward proactive, quantitative solutions to identify, measure and address potential racial bias in insurance pricing were published by the Casualty Actuarial Society (CAS) today.
“These two new reports in our CAS Research Series on Race and Insurance Pricing continue to provide additional insight into industry discussions on this topic,” said Victor Carter-Bey, DM, CAS chief executive officer.
As the professional society of actuaries specializing in property and casualty insurance, the CAS is committed to diversity, equity and inclusion in actuarial work.
To this end, the Society released a series of four CAS Research Papers which are part of CAS’ Approach to Race and Insurance Pricing, approved by the CAS Board of Directors. Each paper addresses a different aspect of race and insurance pricing as viewed through the lens of property and casualty insurance.
Two of the four reports, Understanding Potential Influences of Racial Bias on P&C Insurance: Four Rating Factors Explored, and Defining Discrimination in Insurance, are being released today.
Defining Discrimination in Insurance examines terms such as protected class, unfair discrimination, proxy discrimination, disparate impact, disparate treatment, and disproportionate impact.
Understanding Potential Influences of Racial Bias on P&C Insurance: Four Rating Factors Explored examines how credit-based insurance score (CBIS), geographic location, homeownership and motor vehicle records may be impacted by racially biased policies and practices outside of insurance. The goal is to highlight the multi-dimensional impacts of systemic racial bias, as it may relate to insurance pricing.
The other two reports, Methods for Quantifying Discriminatory Effects on Protected Classes in Insurance, and Approaches to Address Racial Bias in Financial Services: Lessons for the Insurance Industry, were released March 10.
These four research reports are just one way the CAS supports evolving actuarial practices and strengthens the knowledge of its members. The papers demonstrate the Society’s recognition that actuaries—who are responsible for setting insurance rates—must be a voice in an ever-evolving dialogue. The CAS understands that this work is critical to maintaining the Society and its members’ public trust.