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Old 12-11-2019, 02:33 PM
oirg oirg is offline
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If you have access to ISO/Verisk RAPA, RAHO, RACA or RABOP filings, take a look at the explanatory notes on how they do it. If I remember correctly, they first build a regression against protected classes, and then build models using the residuals of that regression.
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Old 01-21-2020, 10:54 AM
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https://papers.ssrn.com/sol3/papers....act_id=3520676

Quote:
Discrimination-Free Insurance Pricing
26 Pages Posted:
Mathias Lindholm
Stockholm University

Ronald Richman
QED Actuaries and Consultants

Andreas Tsanakas
City University London - Cass Business School

Mario V. Wuthrich
RiskLab, ETH Zurich

Date Written: January 16, 2020

Abstract
A simple formula for non-discriminatory insurance pricing is introduced. This formula is based on the assumption that certain individual (discriminatory) policyholder information is not allowed to be used for insurance pricing. The suggested procedure can be summarized as follows: First, we construct a price that is based on all available information, including discriminatory information. Thereafter, we average out the effect of discriminatory information. This averaging out is done such that discriminatory information can also not be inferred from the remaining non-discriminatory one, thus, neither allowing for direct nor for indirect discrimination.

Keywords: discrimination, differentiation, insurance pricing, individual policy char- acteristics, discriminatory covariates, direct discrimination, indirect discrimination, neural networks, complex algorithmic models, causal inference, confounding

JEL Classification: G22, G18, C13, C18, C45, C51, C54

Suggested Citation:
Lindholm, Mathias and Richman, Ronald and Tsanakas, Andreas and Wuthrich, Mario V., Discrimination-Free Insurance Pricing (January 16, 2020). Available at SSRN: https://ssrn.com/abstract=
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Old 01-21-2020, 11:37 AM
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Quote:
Originally Posted by campbell View Post
That looks like something worth adding to the "on a plane" reading list. (I do much of my continuing ed reading while on planes / stuck in airports.)

However, just looking at the abstract, I see a problem in potential US usage: collecting the information necessary would inflame consumer advocates, and introducing a discrimination-free rating algorithm would beg a lawsuit on the preceding implicitly inappropriately discriminatory algorithm(s).
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