Disagreement in the Insurance Industry over Price Optimization

The insurance industry has seen a growing debate over price optimization, including the formation of a National Association of Insurance Commissioners (NAIC) task force designed to investigate such practices. Many industries use price optimization to set prices depending on what a consumer would pay for a good or service, but the accepted practice in the insurance industry—with the consensus support of state insurance regulators—is to base prices on the risk profile alone.

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