I have to agree with Nana Murphy on this issue. Even if scientifically the numbers play out to support credit scoring underwriting it doesn’t factor in the human side of insurance. My fear is if we become too mechanical as an industry we will end up loosing in the end.
As a retired Personal Lines Underwriter of many years for a major Insurance Carrier, I have always been AGAINST credit scoring. There are too many factors that are NOT considered; i.e. divorce, loss of a job, illness to name a few. All of these are uncontrollable and do NOT change a person’s moral character which would lead them to bringing more claims against their insurance carrier.
why should credit scores be used in issuing insurance? it is not like purchasing a house or an automobile. it appears credit scores are used merely to get higher premiums and if so, that is wrong.
The fact that insurance companies hide behind the veil of ‘proprietary’ should make us all VERY leary. I have never met any insurance personnel that can explain how their company’s credit score works, or why even with a great credit you can easily have a lousy credit score. Besides, surcharging someone BEFORE a loss contradicts what insurance is supposed to be…it’s also un-American.
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I have to agree with Nana Murphy on this issue. Even if scientifically the numbers play out to support credit scoring underwriting it doesn’t factor in the human side of insurance. My fear is if we become too mechanical as an industry we will end up loosing in the end.
As a retired Personal Lines Underwriter of many years for a major Insurance Carrier, I have always been AGAINST credit scoring. There are too many factors that are NOT considered; i.e. divorce, loss of a job, illness to name a few. All of these are uncontrollable and do NOT change a person’s moral character which would lead them to bringing more claims against their insurance carrier.
why should credit scores be used in issuing insurance? it is not like purchasing a house or an automobile. it appears credit scores are used merely to get higher premiums and if so, that is wrong.
What is the model to determine a credit score?
The fact that insurance companies hide behind the veil of ‘proprietary’ should make us all VERY leary. I have never met any insurance personnel that can explain how their company’s credit score works, or why even with a great credit you can easily have a lousy credit score. Besides, surcharging someone BEFORE a loss contradicts what insurance is supposed to be…it’s also un-American.