New Academy Issue Brief Provides Actuarial and Regulatory Considerations on Use of Data, Predictive Modeling, and Risk Classification in Insurance Practices

PR Newswire

WASHINGTON, July 6, 2022

WASHINGTON, July 6, 2022 /PRNewswire/ — A new problem short from the American Academy of Actuaries Details Science and Analytics Committee (DSAC) and Property/Casualty Racial Equity Job Force gives a distinct and extensive dialogue of actuarial techniques encompassing information, predictive modeling, and possibility classification that are vital issues for public policymaking and regulatory attempts aimed at ensuring that insurance coverage methods are not “unfairly discriminatory.”

American Academy of Actuaries. (PRNewsFoto/American Academy of Actuaries)

“Ensuring that the evaluation of risk in the insurance policies context does not lead to unfair discrimination is a precedence of the American Academy of Actuaries,” mentioned DSAC Chairperson Dorothy Andrews. “Academy volunteers throughout actuarial practice regions are carrying out a superior level of perform and on a regular basis engaging with regulators and legislators on challenges of bias and the idea of unfair discrimination in insurance coverage, and this new challenge short is a considerable contribution to that exertion.”

The issue transient, An Actuarial Watch of Correlation and Causation: From Interpretation to Practice to Implications, delves into essential inquiries about threat classification and insurance plan ranking variables, especially in the context of massive facts and predictive modeling. The difficulty temporary aims to improve the being familiar with of correlations of possibility qualities vs. causal interactions that are made use of in possibility classification and ratemaking in actuarial observe. It also presents worthwhile data for likely general public coverage answers intended to guard against spurious correlations and correlations that may possibly direct to the application of prohibited ranking variables.

For extra info about the Academy’s ongoing endeavours promoting diversity, equity, and inclusion—including connected Academy publications and comment letters to insurance plan regulators—visit the Academy’s DE&I webpage.

The American Academy of Actuaries is a 19,500+ member experienced affiliation whose mission is to serve the public and the U.S. actuarial job. For additional than 50 decades, the Academy has assisted public policymakers on all degrees by delivering leadership, goal know-how, and actuarial assistance on chance and financial protection issues. The Academy also sets qualification, practice, and professionalism expectations for actuaries in the United States.

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Resource American Academy of Actuaries