Insurance is the business of assessing risks and pricing policies to match. As no two people are entirely alike, that means treating different people differently. But how to segment people without discriminating unfairly? Thankfully, no insurer will ever use membership in a ‘protected class’ (race, gender, religion…) as a pricing factor. It’s illegal, unethical, and unprofitable. But while that sounds like the end of the matter, it’s not. Take your garden-variety ‘credit score.’ Credit scores are derived from objective data that don’t include race, and are highly predictive of insurance losses. ….[READ]
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