Correlating credit and claims experience
Article Abstract:
Some insurers consider a candidate's consumer credit report in deciding whether or not to underwrite a policy, although the weight given to the report varies from agency to agency. Credit ratings are considered because difficult financial circumstances can affect an owner's ability to keep up a property, for example. Recent research confirms a correlation between poor credit and higher loss ratios. Credit reports that are scored according to statistically valid criteria are the most efficient and objective tools for underwriters to use when considering credit in underwriting.
Publication Name: Best's Review Property-Casualty Insurance Edition
Subject: Insurance
ISSN: 0005-9714
Year: 1993
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Credit reports aid underwriters, but is it worth the controversy?
Article Abstract:
Insurance companies are using credit reports to assess the risks of underwriting certain types of policies, but the practice has drawn criticism from consumer groups. Some companies, such as Harleysville Insurance Cos, say they have reduced their losses through the use of credit reports, and industry experts agree that the reports can be useful tools for many types of insurance assessment. Consumer groups have drawn a connection between credit analysis and the illegal practice of redlining. Some executives say the benefits are not worth the potential image problem.
Publication Name: Best's Review Life-Health Insurance Edition
Subject: Insurance
ISSN: 0275-0988
Year: 1995
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Credit reports aid underwriters, but is it worth the controversy?
Article Abstract:
Insurance underwriters, especially for property insurance, often rely on consumer credit ratings to determine whether or not to offer insurance to a customer. Auto and homeowner insurance underwriters have found that a statistically greater number of thefts and arson incidents occur with poor credit histories. The practice of using consumer credit reports, however, is being threatened by possible legislation which would consider the refusal to offer insurance base on credit as discrimination. Use of credit reports varies by state.
Publication Name: Best's Review Property-Casualty Insurance Edition
Subject: Insurance
ISSN: 0005-9714
Year: 1995
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