Verisk Launches Solution for Insurers to Avoid Discriminatory Underwriting Models

The FairCheck fairness-as-a-service solution helps insurers assess underwriting models and variables to address potential regulatory testing requirement.

(Image source: Verisk FairCheck landing page.)

Global data analytics and technology provider Verisk (Jersey City, N.J.) has announced the launch of FairCheck, a solution designed to help insurers test their personal lines models and variables to respond to regulatory changes. FairCheck comprises a customizable, scalable methodology and consultative service to help evaluate and mitigate the potential for unfairly discriminatory outcomes, including in advance of regulatory filings, according to a Verisk statement.

Adrian Cuc, SVP, Analytics, Verisk.

Verisk notes that insurers face enhanced regulatory scrutiny around the effectiveness of modern techniques to prevent unfair discriminatory outcomes as the use of predictive models and similar automated tools increases. Verisk’s solution can help insurers respond to these developments and meet their unique needs in different states.

“We took a proactive approach in assessing our own personal auto rating model to determine whether there were unfair pricing differentials regarding race,” said Adrian Cuc, SVP, Analytics at Verisk. “We discovered that race was not a contributing factor in our model. The analysis serves as a foundation for our FairCheck solution that is customizable to assess individual insurer models, different variables within their models and various geographical regions for potential unintended bias. It is a meaningful step in measuring and understanding what impact, if any, race may play in insurer pricing models. By understanding its potential impact, an insurer can determine whether they need to begin to evaluate and mitigate the potential for unfairly discriminatory outcomes.”

Michael Angelina, Executive in Residence, Maguire Academy of Insurance and Risk Management.

Verisk reports that it has longstanding historical practices and protocols to protect against unfair discrimination related to the ratemaking process, while supporting actuarially sound, cost-based pricing. With one of the largest insurance databases, it says it was able to test and develop a methodology to effectively investigate the role of race in personal lines pricing models and variables and quantify its contribution to loss costs. The results of the analysis were published in the white paper, “Assessing for Unfair Discrimination with Respect to Race in a Personal Rating Model.”

Verisk’s methodology was reviewed by the Maguire Academy of Insurance and Risk Management in the Haub School of Business of Saint Joseph’s University (Philadelphia).

“It is quite obvious that Verisk put much thought into the process for this study,” comments Michael Angelina, executive in residence of the Maguire Academy of Insurance and Risk Management. “As Verisk is taking a leading role in this equity in insurance initiative, getting the approach correct is imperative, and I believe that they have developed a robust process.”

Neil Spector, President, Underwriting Solutions, Verisk.

With what it refers to as its proven methodology and team of experts in government relations, actuarial science, data science and analytics, Verisk says it is equipped to help support impartial underwriting and rating outcomes that benefit insurers, regulators and consumers alike.

“Our team took a rigorous and objective approach to analyzing and developing a methodology that helps ensure equitable insurance offerings for all,” comments Neil Spector, president, Underwriting Solutions, Verisk. “The insurance regulatory landscape is constantly evolving, and with our vast data and leading compliance and regulatory services, we’re uniquely positioned to help the industry adapt and respond to changes.”

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Anthony R. O’Donnell // Anthony O'Donnell is Executive Editor of Insurance Innovation Reporter. For nearly two decades, he has been an observer and commentator on the use of information technology in the insurance industry, following industry trends and writing about the use of IT across all sectors of the insurance industry. He can be reached at or (503) 936-2803.

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