Posted On: November 29, 2006, 9:40 am CST

Posted By: Ratemaker

What you say has merit, but the same can be said of many of the traditional rating factors, too. I mean, do you really think every young male is automatically a worse risk? What many of the rating variables in use by the industry are trying to measure is responsibility and attentiveness - personality characteristics that can't be measured directly.

While it may not directly impact driving ability, a person who is inattentive and irresponsible with their finances is probably inattentive and irresponsible in other facets of their life. Yes, I know that not everyone with a poor credit history is irresponsible or inattentive - some are just unlucky. However, many jurisdictions require insurers to apply a 'neutral' score in cases when a major life disruption (such as divorce, death of a spouse, loss of job, or major illness/surgery) is the root cause of a poor score.

I too work for a major insurer, and I've seen our numbers - the difference in losses from the lowest to the highest scores is consistent and real.

Yes, Credit has its flaws, but so does every other variable we use. I'm not saying credit should go away, but I would like to see the industry find new variables to replace credit to the extent possible. If the influence of credit can be lessened in favor of more socially acceptable and more easily understood variables, I'm all for it. But I don't want the government to tell me what I can and can't use to price my product any more than they already do.