Actuarial Expertise

New CAS Research Series Explores Race and Insurance Pricing

In March 2022, the CAS released four new reports designed to guide the insurance industry toward proactive, quantitative solutions to identify, measure and address potential racial bias in insurance pricing. The CAS Research Paper Series on Race and Insurance Pricing features papers that address various aspects of race and insurance pricing as viewed through the lens of property and casualty insurance. The series supports the CAS Approach to Race and Insurance Pricing, adopted by the CAS Board of Directors in December 2020, which outlines four key areas of focus and goals: basic and continuing education; research; leadership and influence; and collaboration.

The four reports, available on the CAS website, are:

Methods for Quantifying Discriminatory Effects on Protected Classes in Insurance illustrates approaches to defining and measuring fairness in predictive models. It provides an overview of bias mitigation techniques that can be performed during the input, modeling or output phase of a model, once a set of fairness criteria has been adopted.

Approaches to Address Racial Bias in Financial Services: Lessons for the Insurance Industry explores issues of racial bias in lending practice for mortgages, personal and commercial lending as well as credit-scoring. It looks at these four areas and describes solutions intended to address any potential bias, which may include government intervention, internal bias testing and monitoring measures, and new products development to mitigate bias.

Defining Discrimination in Insurance covers terms such as protected class, unfair discrimination, proxy discrimination, disparate impact, disparate treatment and disproportionate impact. It provides historical and practical context for these terms and illustrates the inconsistencies in how different stakeholders define them; it also describes the potential impacts of these definitions on actuarial work.

Understanding Potential Influences of Racial Bias on P&C Insurance: Four Rating Factors Explored examines how credit-based insurance score (CBIS), geographic location, homeownership and motor vehicle records may be impacted by racially biased policies and practices outside of insurance. The goal is to highlight the multidimensional impacts of systemic racial bias as it may relate to insurance pricing.

Each paper stands alone and does not need to be read in a specific order. Inquiries or feedback regarding the papers may be sent to Anyone interested in contributing literature to the research on Race and Insurance Pricing should refer to the Submit Your Work page on the CAS website and review the guidance for submissions under E-Forum or Working Papers.