Just got off the phone with an insurance company who told me proudly that they are using predictive analytics to quick-issue policies. Two factors he highlighted were credit checks and postal code (location). He doubled down by noting that other companies are doing this as well.
So, they do a credit and location check, and based on that they determine what underwriting requirements to order. The end result, areas where some races may be predominant, and I guess may have lower creditworthiness overall, end up getting more medical requirements. More medical requirements results in more ratings and/or more denials. Which results in some races being charged more or being denied more.
Educate me here. Is this not Redlining? (where you charge people more based on location, where location is correlated by race, so you end up charging based on race, even if inadvertently).
I’m actually surprised this is legal in Canada, though i guess it is. Are the companies just open to being accused of redlining? Or maybe there’s other methods being used in conjunction with this data to remove any possibility of systemic racism?