The Impact of Credit-Based Insurance Scoring on the Availability and Affordability of Insurance - Part I
National News • September 24, 2008
Following is the testimony presented by Lawrence S. Powell, PhD before the United States House of Representatives Financial Services Committee Oversight & Investigations Subcommittee on May 21, ...
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Subject: Re: The Impact of Credit-Based Insurance Scoring on the Avai
Posted On: September 24, 2008, 1:15 pm CDT
Posted By: Thomas E. Nelson
Comment:
If credit scoring is a positive predictor of the frequency and severity of loss for autos then the current credit crisis that is going on due to the collapse of Fanny Mae, Freddie Mac, AIG, etc, etc., etc. should have a dramatic impact on the loss ratios of insurance companies.
When millions of people lose their jobs, their homes, their savings and retirement becaue of the investment meltdown, if credit "insurance" scoring is valid, then there should be a corresponding dramatic increase in auto insurance claims experience. If not, then the lack of intuitive link is because there is a casual connection not a causal connection between credit scoring and loss experience.
Thomas E. Nelson, CIC, ALCM, CRM
Subject: Re: The Impact of Credit-Based Insurance Scoring on the Avai
When millions of people lose their jobs, their homes, their savings and retirement becaue of the investment meltdown, if credit "insurance" scoring is valid, then there should be a corresponding dramatic increase in auto insurance claims experience. If not, then the lack of intuitive link is because there is a casual connection not a causal connection between credit scoring and loss experience.
Thomas E. Nelson, CIC, ALCM, CRM