Insurance Industry Urged to Explore Alternatives to Credit Scoring
Insurance Journal—April 14th, 2010
With the use of credit scoring still under attack, the insurance industry would be wise to consider new ways to assess risk, according to an industry actuary.
Roosevelt Mosley, a principal with Pinnacle Actuarial Resources Inc. said insurers will need to develop additional analysis techniques to help them assess risks if they can no longer use credit in the underwriting process.
Mosley was speaking to attendees at a Casualty Actuarial Society (CAS) ratemaking seminar in Chicago.
Mosley noted that this year, about 26 bills have been introduced in state legislatures that targeting insurers’ use of credit. “This issue is not going to go away,” he said.
In addition, a number of studies and court cases as well as anecdotal evidence, public perception, and the credit crisis have brought the issue of credit scoring in underwriting into the spotlight again, he said.
“In the last couple of years, the credit crisis and related economic troubles have served to reenergize the debate,” he said.
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