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  #51  
Old 03-31-2017, 01:27 PM
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Sure, insurance companies can afford to lose a little money here & there by deliberately underpricing any sufficiently small group of people. That doesn't make it wise to engage in intentional underpricing.
I don't think it's underpricing. I think it's "we have no way of knowing what the most appropriate rate is" pricing. And it's often wise to do that if it's not in a way that risks losing too much money.
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  #52  
Old 03-31-2017, 03:29 PM
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I don't think it's underpricing. I think it's "we have no way of knowing what the most appropriate rate is" pricing. And it's often wise to do that if it's not in a way that risks losing too much money.
Disagree... we know that suicide rates are high among transgendered, and no reason to believe there's any advantages to transgenderism that would offset the high suicide rates, so based on what little we do know, there's enough to suggest that the rates should potentially be higher and certainly not lower.

I don't know how it works in P&C, but in Life where it's not possible to fill in gaps in our knowledge about mortality, we make best guess estimates and err on the side of conservatism. And sometimes we walk away from risks if we think they are so unknown that we're not willing to take a chance on them.

A reasonable best guess for a trans-person's mortality is higher than that of a cis-gendered person with the same sex at birth.

Business decisions are made all the time to do things that are not actuarially ideal, but it's disingenuous to say that it's not deliberately underpricing.
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  #53  
Old 03-31-2017, 03:31 PM
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Regulatory/PR exposure worse than potential underwriting losses?
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  #54  
Old 03-31-2017, 03:32 PM
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Regulatory/PR exposure worse than potential underwriting losses?
Sure, that would be a business decision to deliberately underprice.
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  #55  
Old 03-31-2017, 07:39 PM
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Disagree... we know that suicide rates are high among transgendered, and no reason to believe there's any advantages to transgenderism that would offset the high suicide rates, so based on what little we do know, there's enough to suggest that the rates should potentially be higher and certainly not lower.

I don't know how it works in P&C, but in Life where it's not possible to fill in gaps in our knowledge about mortality, we make best guess estimates and err on the side of conservatism. And sometimes we walk away from risks if we think they are so unknown that we're not willing to take a chance on them.

A reasonable best guess for a trans-person's mortality is higher than that of a cis-gendered person with the same sex at birth.

Business decisions are made all the time to do things that are not actuarially ideal, but it's disingenuous to say that it's not deliberately underpricing.
I believe the question was whether transpeople are underwritten based on their current legal gender or their prior legal gender. I am going to stick to my guns and say that I doubt anyone knows enough to know whether the data supports rating a transman as a man or as a woman, and I believe companies should make that choice based on other criteria, such as how their customers and regulators will react to their decision.

If you want to argue that being trans ought to be its own rating variable, like having diabetes, I think that's a separate question.

I will say that in the P&C world there are always tons of variables that appear to be predictive, and we don't use most of them, because we want to have rating plans that are accepted by regulators and our customers, and that are not unduly complex. That's not "deliberately underpricing", that's deliberately under-specifying. It's not as if we throw away the losses incurred by young urban men when we calculate the rates, we just limit the impact of those variables, and in effect smear the excess liability onto everyone else. And yes, that can lead to anti-selection.

But insurance companies didn't go broke when they were barred from rating black and white lives separately, and I really don't think the choices companies make regarding trans lives are going to create any significant market disruption.
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  #56  
Old 04-02-2017, 09:31 AM
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I believe the question was whether transpeople are underwritten based on their current legal gender or their prior legal gender. I am going to stick to my guns and say that I doubt anyone knows enough to know whether the data supports rating a transman as a man or as a woman, and I believe companies should make that choice based on other criteria, such as how their customers and regulators will react to their decision.

If you want to argue that being trans ought to be its own rating variable, like having diabetes, I think that's a separate question.

I will say that in the P&C world there are always tons of variables that appear to be predictive, and we don't use most of them, because we want to have rating plans that are accepted by regulators and our customers, and that are not unduly complex. That's not "deliberately underpricing", that's deliberately under-specifying. It's not as if we throw away the losses incurred by young urban men when we calculate the rates, we just limit the impact of those variables, and in effect smear the excess liability onto everyone else. And yes, that can lead to anti-selection.

But insurance companies didn't go broke when they were barred from rating black and white lives separately, and I really don't think the choices companies make regarding trans lives are going to create any significant market disruption.
Insurers are required by law to underwrite blacks & whites the same so no anti selection is really possible. If they weren't, and insurers varied in whether they used race as a rating variable, I'm pretty sure that there would be anti selection.

Since it's unlikely that sex as a rating variable is going away in most states, putting transgender lives into the category that most closely represents their underlying mortality seems prudent. And our best guess is that sex at birth is going to be closer than current gender... or even their own category that's likely worse than either male or female. There's probably not enough data or enough trans customers to bother with creating new sex categories, so sex at birth is probably what would be chosen.

Of course if everyone else goes the way if Montana & the EU, then it's a moot point, but in the meantime, a categorization must be made.
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  #57  
Old 04-02-2017, 02:28 PM
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Insurers are required by law to underwrite blacks & whites the same so no anti selection is really possible. If they weren't, and insurers varied in whether they used race as a rating variable, I'm pretty sure that there would be anti selection.
have you ever heard of red-lineing?

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Since it's unlikely that sex as a rating variable is going away in most states, putting transgender lives into the category that most closely represents their underlying mortality seems prudent. And our best guess is that sex at birth is going to be closer than current gender...
that's your best guess. And I believe you are factually wrong. Transmen take testosterone, which probably influences a lot of causes of death, including men's higher propensity to get into accidents and fights. Similarly, transwomen have much less testosterone than men. I believe the jury is still out.
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or even their own category that's likely worse than either male or female.
yes, that's likely.
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There's probably not enough data or enough trans customers to bother with creating new sex categories, so sex at birth is probably what would be chosen. .
I doubt it. Do you want the cost of policing that? Even ignoring the bad publicity, you've just added significant administrative costs. It's far easier to verify sex on your drivers licence.
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Of course if everyone else goes the way if Montana & the EU, then it's a moot point, but in the meantime, a categorization must be made.
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  #58  
Old 04-02-2017, 03:13 PM
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It's far easier to verify sex on your drivers licence.
That will work until CA or some other state adds a variety of sex codes to the DL.

----------

I would think that, so far as UW life insurance is concerned, a history of surgery and hormone replacement might (just might) produce some debits and maybe (just maybe) disqualify a person for any "preferred" premium rating.
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  #59  
Old 04-03-2017, 07:12 AM
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That will work until CA or some other state adds a variety of sex codes to the DL.

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I would think that, so far as UW life insurance is concerned, a history of surgery and hormone replacement might (just might) produce some debits and maybe (just maybe) disqualify a person for any "preferred" premium rating.
yes, that's probably true. I was only arguing about whether to classify trans people based on their current sex or something else.

I do expect we will get at least one more legal sex in at least a few states (neither, or between, or something like that) and yes, insurers will have to react in some way. A lot of the "neither"s don't take hormones or have gender confirmation surgery, and my guess is they are healthier than earlier generations of transpeople. But insurers will need to do something with them, whether it's to add a third sex to the database or to classify those people in some other way.
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  #60  
Old 04-03-2017, 09:32 AM
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have you ever heard of red-lineing?
Sure... all of this was assuming that the insurer is even willing to take on the risk in the first place.

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that's your best guess. And I believe you are factually wrong. Transmen take testosterone, which probably influences a lot of causes of death, including men's higher propensity to get into accidents and fights.
Sure, I think it's likely that all transgenders are worse than all cis genders due to suicide, but assuming that a new rating category is unlikely to be formed, and there are far more transwomen than transmen, sex at birth is closer than current gender.

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Similarly, transwomen have much less testosterone than men. I believe the jury is still out.
I doubt this moves the needle on transwomen enough (if at all) to get their mortality closer to cis-gendered women than cis-gendered men, given the increased risk of suicide.

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Do you want the cost of policing that?
We already draw blood... how much expense is there in verifying the absence or presence of a Y chromosome? Even if it's too expensive now, the cost will come down in the future. And if you ask for sex at birth on the application, a lot of people will be truthful. If they lied, the insurer would have grounds to deny the claim & refund the premium, or pay a reduced claim based on actual sex at birth come claim time (where it is more likely to come out).

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Even ignoring the bad publicity, you've just added significant administrative costs. It's far easier to verify sex on your drivers licence.
There might be additional cost in checking the blood sample for a Y chromosome, but beyond that, I fail to see how "sex at birth" is any more burdensome than "current gender".
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