Related papers: Algorithmic Audit of Italian Car Insurance: Evidence of Unfairness in Access and Pricing

Algorithmic Audit of Italian Car Insurance: Evidence of Unfairness in Access and Pricing

URL: http://arxiv.org/abs/2105.10174v1
Date: Fri, 21 May 2021 07:35:47 GMT
Title: Algorithmic Audit of Italian Car Insurance: Evidence of Unfairness in Access and Pricing
Authors: Alessandro Fabris, Alan Mishler, Stefano Gottardi, Mattia Carletti, Matteo Daicampi, Gian Antonio Susto and Gianmaria Silvello
Abstract summary: We conduct an audit of pricing algorithms employed by companies in the Italian car insurance industry. We show that birthplace and gender have a direct and sizeable impact on the prices quoted to drivers. We find that drivers with riskier profiles tend to see fewer quotes in the aggregator result pages.
Score: 57.34513043917978
License: http://creativecommons.org/licenses/by-nc-sa/4.0/
Abstract: We conduct an audit of pricing algorithms employed by companies in the Italian car insurance industry, primarily by gathering quotes through a popular comparison website. While acknowledging the complexity of the industry, we find evidence of several problematic practices. We show that birthplace and gender have a direct and sizeable impact on the prices quoted to drivers, despite national and international regulations against their use. Birthplace, in particular, is used quite frequently to the disadvantage of foreign-born drivers and drivers born in certain Italian cities. In extreme cases, a driver born in Laos may be charged 1,000 euros more than a driver born in Milan, all else being equal. For a subset of our sample, we collect quotes directly on a company website, where the direct influence of gender and birthplace is confirmed. Finally, we find that drivers with riskier profiles tend to see fewer quotes in the aggregator result pages, substantiating concerns of differential treatment raised in the past by Italian insurance regulators.

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