JERSEY CITY, Nov. 15, 2023 (GLOBE NEWSWIRE) -- Insurers now have a proven method
to help assess their pricing models for unfair discrimination against certain
protected classes, like race. Verisk (Nasdaq: VRSK), a leading global data
analytics and technology provider, today announced the launch of FairCheck, a
solution designed to help insurers test their personal lines models and
variables to respond to regulatory changes. FairCheck comprises a customizable,
scalable methodology and consultative service to help evaluate and mitigate the
potential for unfairly discriminatory outcomes, including in advance of
regulatory filings.
As the use of predictive models and similar automated tools increases, coupled
with a heightened focus on diversity, equity and inclusion, there has been
enhanced regulatory scrutiny around the effectiveness of modern techniques to
safeguard against unfairly discriminatory outcomes. Verisk's solution can help
insurers respond to these developments and meet their unique needs in different
states.
"We took a proactive approach in assessing our own personal auto rating model to
determine whether there were unfair pricing differentials regarding race," said
Adrian Cuc, senior vice president of analytics at Verisk. "We discovered that
race was not a contributing factor in our model. The analysis serves as a
foundation for our FairCheck solution that is customizable to assess individual
insurer models, different variables within their models and various geographical
regions for potential unintended bias. It is a meaningful step in measuring and
understanding what impact, if any, race may play in insurer pricing models. By
understanding its potential impact, an insurer can determine whether they need
to begin to evaluate and mitigate the potential for unfairly discriminatory
outcomes."
Verisk has longstanding historical practices and protocols to protect against
unfair discrimination related to the ratemaking process, while supporting
actuarially sound, cost-based pricing. With one of the largest insurance
databases, it was able to test and develop a methodology to effectively
investigate the role of race in personal lines pricing models and variables and
quantify its contribution to loss costs. The results of the analysis were
published in the white paper, "Assessing for Unfair Discrimination with Respect
to Race in a Personal Rating Model
(https://verisk.com/insurance/campaigns/assessing-for-unfairly-discriminatory-
outcomes/?&utm_source=wire&utm_medium=pr&utm_campaign=uw-pl-faircheck_launch-
2023-11-13)."
Verisk's methodology was reviewed by the Maguire Academy of Insurance and Risk
Management in the Haub School of Business of Saint Joseph's University.
"It is quite obvious that Verisk put much thought into the process for this
study," said Michael Angelina, executive in residence of the Maguire Academy of
Insurance and Risk Management. "As Verisk is taking a leading role in this
equity in insurance initiative, getting the approach correct is imperative, and
I believe that they have developed a robust process."
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 and rating outcomes that benefit insurers,
regulators and consumers alike.
"Our team took a rigorous and objective approach to analyzing and developing a
methodology that helps ensure equitable insurance offerings for all," said Neil
Spector, president of Underwriting Solutions at Verisk. "The insurance
regulatory landscape is constantly evolving, and with our vast data and leading
compliance and regulatory services, we're uniquely positioned to help the
industry adapt and respond to changes."
About Verisk
Verisk (Nasdaq: VRSK) is a leading strategic data analytics and technology
partner to the global insurance industry. It empowers clients to strengthen
operating efficiency, improve underwriting and claims outcomes, combat fraud and
make informed decisions about global risks, including climate change, extreme
events, ESG and political issues. Through advanced data analytics, software,
scientific research and deep industry knowledge, Verisk helps build global
resilience for individuals, communities and businesses. With teams across more
than 20 countries, Verisk consistently earns certification by Great Place to
Work (https://www.greatplacetowork.com/certified-company/1288593) and fosters
an inclusive culture (https://www.verisk.com/about/inclusion-diversity-
belonging/) where all team members feel they belong. For more, visit Verisk.com
(https://www.verisk.com/) and the Verisk Newsroom
(https://www.verisk.com/newsroom/).
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