Last year, the Casualty Actuarial Society released a research paper series focused on race and insurance pricing in an effort to guide the insurance industry toward proactive, quantitative solutions to identify, measure and address potential racial bias in insurance
pricing. Our Inclusion in Action Newsletter Team sat down with Mallika Bender member of the CAS DEI team, to learn more about their efforts in addressing diversity, equity and & inclusion across the insurance industry..png)
Access the entire research series here.
When did the Casualty Actuarial Society (CAS) first make a concentrated effort to approach diversity, equity and inclusion as an organization? What prompted such involvement?
CAS has been working on diversity, equity and inclusion for decades, long before I became a member and got involved in the work. As far back as the late 1990s CAS and the Society of Actuaries have worked together to increase the diversity of the actuarial profession, from what was originally called the Joint Committee on Minority Recruiting to today’s Joint Committee for Inclusion, Equity and Diversity. While we have been working on encouraging students from underrepresented groups to pursue the profession, we also co-commissioned a study in 2018 to understand the specific barriers to entry impacting Black and Latino students. Much of our DE&I effort has been tailored towards addressing those barriers since then.
CAS recently launched a research paper series to address diversity, equity and inclusion across the industry. Can you tell us a little about the research papers and how the idea to bring them to fruition came into place?
When we think about DE&I, our focus tends to be on recruiting, hiring, and advancing diverse professionals. CAS has decided to broaden that focus to how DE&I can be considered in the context of the work that actuaries perform. The insurance industry refocused on issues of potential racial bias in insurance practices in 2020, and we wanted to make sure that actuaries were encouraged and equipped to play a proactive role in those discussions. That desire prompted the CAS to outline our “Approach to Race and Insurance Pricing.” We’ve published four research papers this year, which focus on issues surrounding potential racial bias in insurance pricing and aim to help our community of insurance professionals understand key terminology, history, context and potential solutions to address these issues.
What do you all ultimately seek to accomplish with this research paper series?
We’re hoping that this research provides a foundation on which actuaries and insurance professionals can confidently lend their expertise to the broader industry discussions on race and insurance. I hope that these papers also serve to motivate our community to look at our work through a different lens and collaborate with other industry stakeholders to develop new solutions to these important issues.
Which of the four research papers would you recommend independent agents explore first? Why?
I think a great starting point for independent agents is our paper titled “Understanding Potential Influences of Racial Bias on P&C Insurance: Four Rating Factors Explored.” This paper examines how racially biased policies and practices outside of the system of insurance may have an impact on four commonly used rating factors in personal lines insurance—credit-based insurance score, geographic location, home ownership and motor vehicle records. We cover issues like segregation, lending discrimination and traffic enforcement practices and consider how those practices could impact insurance rating.
What’s next on the horizon for CAS as it pertains to DE&I initiatives?
We’re looking forward to kicking off our next phase of research. We are holding discussions with our community, stakeholders and potential collaborators about potential research topics to pursue next, with the aim of beginning our next round of research later this year. CAS is actively seeking out opportunities to partner and collaborate with other organizations on this work, so I encourage the readers of this newsletter to reach out to me at diversity@casact.org if you are interested in learning more and working with us on this effort!