Credit is an important aspect when it comes to underwriting of insurance products. UIPI intends on using “baseline credit information” but realizes “traditional underwriting information typically has been insufficient for accurately predicting risk in emerging, often urban markets” said UIPI President Suzanne Reade. According to the Center for Financial Services Innovation “up to 70 million consumers in the U.S. may have no credit history or incomplete credit files.”
An interesting part of this study will be the incorporating of data from Convergence Data, the sole supplier of non-traditional credit data for insurance underwriting. Convergence data “will provide a wide array of information not typically reported to the major credit bureaus, including check writing history, banking activity history, payday loans, installment credit payments and debit card transaction history.”
Bill Wilson, chief operating officer of Convergence Data, commented, “Our experience has shown that we have positive underwriting data on about two-thirds of this population, enabling insurers to confidently offer better rates based on better risk information.”
I encourage you to read the article on the insurance journal website and also visit the UIPI website for more information about this fascinating study.
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