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The use of credit data for risk classification in automobile insurance

Author

Listed:
  • Kamil Gala

    (Ubezpieczeniowy Fundusz Gwarancyjny)

  • Karolina Kolak

    (Ubezpieczeniowy Fundusz Gwarancyjny)

Abstract

This paper presents theoretical and practical aspects of using credit data in insurance risk classification. The correlation between credit history and insurance losses is discussed, as well as its possible sources and methods of analysis. Furthermore, the literature on the subject is reviewed, with a focus on the results of empirical studies and practical implementations. Finally, the paper describes the setting of the research study conducted jointly by the Polish Insurance Guarantee Fund and Credit Information Bureau to identify the correlation between credit history and insurance losses in the Polish automobile insurance market. The results of the study indicate that the cooperation between insurers and banks in this field may be beneficial.

Suggested Citation

  • Kamil Gala & Karolina Kolak, 2015. "The use of credit data for risk classification in automobile insurance," Collegium of Economic Analysis Annals, Warsaw School of Economics, Collegium of Economic Analysis, issue 37, pages 73-98.
    • Handle: RePEc:sgh:annals:i:37:y:2015:p:73-98
    as

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    References listed on IDEAS

    as
    1. Patrick L. Brockett & Linda L. Golden, 2007. "Biological and Psychobehavioral Correlates of Credit Scores and Automobile Insurance Losses: Toward an Explication of Why Credit Scoring Works," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 74(1), pages 23-63, March.
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