Fair risk assessment in life & health insurance

Private insurance relies upon the use of objective, relevant and reliable data for insurance pricing purposes.

Governments and regulators are exerting increased influence on the risk selection process of the private life and health insurance industry. This trend was placed in the spotlight by the 1 March 2011 European Court of Justice ruling on the use of gender in insurance.  While the ruling surprised some, it follows three decades of regulatory developments and pressure on the industry to prove that its risk selection process is fair, and that the price charged to the consumer of insurance products is actuarially sound.

In response to the EU Gender Directive, Fair risk assessment in life & health insurance, a Swiss Re publication, establishes  the principles underlying life insurance pricing and the themes of discrimination, privacy, and entitlement.  The publication provides context for the continuing debate and supports informed regulatory developments in the future. A key topic is the actuarial and data-driven basis behind differentiated pricing , a factor that ensures fairness and competitive prices.

Proving that certain long-established risk selection practices are indeed equitable is a priority for the industry. The challenges it faces should also act as a further stimulus to continue looking for ways of bringing increasing numbers of people into the insurable pool.  The  industry has a lot of work ahead in trying to shape as favourably as possible the implementation of an amended EU Gender Directive and, more importantly, influencing the outcome of the draft EU Directive on age and disability.

Published 6 June 2011


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