Fairness and Discrimination in Underwriting

The two big ethical issues that firms have to engage with are fairness and discrimination in insurance underwriting. And this will not be easy for many insurance people, who see themselves as good people providing an important service. Yet every firm will have to evidence the distance between their performance and the outcomes that are causing concerns. You can break down the overall topic of fairness and discrimination in insurance underwriting into  

  • fair decisions and discriminatory practices;
  • stratification and vulnerability; 
  • application fraud;
  • behavioural patterns in underwriting settings. 


Few consumers understand the complexities of insurance, but all consumers reject unfairness and discrimination. What this does, in classic risk assessment language, is heighten the significance of these two ethical risks, were the sector to find itself under such scrutiny. The impact of a detrimental finding would be enormous.

So what about the likelihood of the sector being scrutinised on fairness and non-discrimination?  Several signs point to that likelihood being much greater than most insurers realise. Why after all would the most powerful committee in the UK Parliament discuss discrimination in insurance pricing? Why is it sometimes a front page headline? 

Together, these move fairness and discrimination in insurance underwriting towards the priority box for closer scrutiny and control. Two key audiences will want to see what happens as a result.

The FCA has been told in no uncertain terms by its political masters to extract evidence from insurers on how their operations are compliant with equalities legislation. And given that the UK's Prudential Regulatory Authority has designated data as a prudential risk, the need for chief risk officers to understand its roots and implications is self-evident. 


Data, Equality and Insurance 

I undertook this survey of six insurers back in 2015. The results were very surprising and illustrated for me just how far insurers had to go on the issue of discrimination in insurance underwriting. How does your firm compare? 

Data, Equality and Insurance - a Small Survey

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Discrimination is an enormous ethical challenge 

What is turning discrimination into such an ethical challenge for insurers? In this article, I examine the signals that have put discrimination into the priority list, and what insurers should be doing in response.  

Why discrimination is an enormous ethical challenge for insurance

Article  |  xx minute read

Unintentional Discrimination  

Discrimination is judged by outcomes, which makes unintentional discrimination such a difficult thing. In this article from 2015, I examine how it can come about. 

The Dangers of Unintentional Discrimination


Fairness in Insurance

Insurance has adopted a narrative around fairness that needs to be rethought. In this article, I critique one of the leading papers on this, drawing different conclusions...

Building a Persuasive Argument on Fairness

The Four Dimensions of Fairness in Insurance

The debate around fairness in insurance is more complex than insurers understand. I explain how it is evolving...

Why Equality of Fairness will Shape the Future of Insurance

Fairness Examined

Academic researchers are examining 'actuarial fairness' and finding a much more nuanced situation... 

Insurance Fairness and the Work of Marie Curie

Behavioural Fairness is a Serious Risk to the Future of Insurance 


The Spectre of Stratified Markets 

We are already seeing signs of stratification in some sectors of the insurance market. And as this builds, so will the response from the regulator. The platform upon which they will address this issue will probably be vulnerability.

The New Vulnerability that your Firm needs to Address

The following articles set out some of the issues that have to be addressed...

2014 : Social Sorting - the Stuff of Nightmares  

2018 - Insuring People with Experience of Mental Illness

2020 - Insurers must Prepare for Big Changes around Genetic Testing

What matters now is that insurers recognise the issue, understand its implication and have their response under way. This is the direction in which the vulnerability agenda will develop with the most impact on insurer strategies.


A Critical Friend

I help insurers think about complex issues from a different perspective.

Insurance markets are facing some complex ethical challenges, particularly around underwriting. Insurers use my insight and lateral thinking to gain an extra level of understanding about such challenges

Example - A leading UK insurer wanted to better understand the arguments about discrimination in insurance and so brought me in to provide independent insight. This helped them to conduct further in-house analysis and monitor ongoing developments.

Get in touch if you'd like to have an informal chat.


Ethical Awareness for Underwriters

No one in insurance sets out to build fairness and discrimination into their underwriting, yet we know that it can at time happen. Often, this is down to what people in my line of work call 'behavioural ethics'. In these articles, I look at three behavioural patterns that can at times undermine the best of ethical intents....

1.  The Tangible / Abstract Divide

2.  The Self Serving Bias

3.  Over Optimism

Behavioural patterns like these will be influencing your firm's ethical culture and so need to be addressed through the work your firm does there.    

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