Credit_Scoring

Credit Scoring The Problem The insurance industry has begin using customers ‘credit history as the basis for underwriting to determine the insurance premium. This method is being applied to all aspects of property and casualty insurance and in some states is considered an unfair practice. Using this method to determine customers’ premiums has made insurance unaffordable and caused a financial hardship to some customers. Organization renewal is an important factor in business, but this type of renewal seems to do more harm to the consumer by increasing profits for the insurance companies. Micro Identification The micro identification of this problem is that insurance companies will have a better book of business by writing insurance for people with high credit scores. Insurance companies have found that people with high credit scores usually will not file a claim for something they have the money to pay for themselves. Macro Identification The macro identification of this problem is that customers with low credit scoring usually do not have disposable income and rely on credit or insurance to cover a loss that occurs. When using credit, payments are usually late or not made, which the insurance companies use to place these people in a insurance, credit, scoring, rate, factor, companies, state, determining, premium, underwriting, states, consumer, company, change, should, changes, using, risk, problem, industry, rates, people, need, model, customers, time, management, high, data, cover, business, aware, stage, scores, policy