FSRA’s Auto Insurance Products group is seeking to initiate a project that focuses on the evaluation of credit utilization in auto insurance specifically within Ontario. We are planning to engage a consulting firm to lead this study.
The project's scope will encompass the following key areas:
1. Participation in a working group and collaboration with FSRA regulated entities to define, collect, and model relevant data.
2. Analysis of the implications to various risk groups associated with the utilization of credit by examination of key rating characteristics in auto insurance, including predictive power of credit, and change in predictive power of other rating variables.
3. Assessment of the fairness implications arising from credit utilization.
4. Evaluation of the positive and negative impacts of credit utilization in Ontario auto insurance.
5. Jurisdictional scan of credit utilization in other jurisdictions (within Canada, U.S. and other countries), in auto insurance and across various insurance products, and its impact on consumer outcomes and experiences.
6. Comprehensive report detailing the findings and analysis of the project, including an overview of the collected data and modeling results.
7. Recommendations to FSRA on the utilization of credit in auto insurance, based on the study's findings and assessment of fairness.
The goal of this project is to gain a comprehensive understanding of the use of credit in auto insurance and its various aspects. This will enable us to make recommendations regarding its relevance and potential enhancements to support FSRA’s Rate and Underwriting Regulation Reform Strategy.
