This video by Bella Thiel explores the challenges, ethics, and innovations shaping modern insurance pricing. Key issues include overfitting, multicollinearity, and the risks of using proxy variables such as credit score. Ethical debates around fairness, affordability, and the role of climate change highlight the societal impact of actuarial decisions. Emerging techniques like telematics-based pricing offer new opportunities but raise privacy concerns. Actuaries play a crucial role in balancing accuracy, equity, and sustainability in pricing models.
Contributors: Bella Thiel; Karen Grote, FSA, MAAA, CERA; Jon Forster, ASA, MAAA