Actuaries Have Special Role When Explaining Credit Scores and Losses
National News • November 16, 2007
By explaining why there is an association between credit scores and insurance losses, insurers and actuaries can promote a better understanding of why credit scores are a useful underwriting tool, ...
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Subject: RE: credit scoring: fraud and loss ratios - to Dustin
Posted On: November 19, 2007, 2:42 pm CST
Posted By: Kent
Comment:
Nebraskan is correct in that credit is only one factor in rating. I support the use of credit but, think it has too much weight with some carriers. Using insurance fraud convictions as an example is simply a conversational tool that I use with customers in order to bring some validity to the use of credit. Please remember that those customers that were convicted had REALLY BAD CREDIT SCORES!!! I remember when carriers would decline a risk altogether based solely on credit scores.
I have difficulty in accepting some rates on customers with average credit in that they are obviously not fraud candidates. I don't think even the best actuaries have developed good scoring models - fair at best! I think that we need to provide adequate explanation to our customers and legislators that the continued use of credit rating has merit.
Subject: RE: credit scoring: fraud and loss ratios - to Dustin
I have difficulty in accepting some rates on customers with average credit in that they are obviously not fraud candidates. I don't think even the best actuaries have developed good scoring models - fair at best! I think that we need to provide adequate explanation to our customers and legislators that the continued use of credit rating has merit.