What do insurance scores often correlate with in the underwriting process?

Insurance scores often correlate closely with an applicant's credit score and their likelihood of filing high claims. The underpinning of this relationship lies in the statistical analysis that insurers perform; they have found that individuals with higher credit scores tend to file fewer and less costly claims. This connection helps underwriters assess risk levels associated with policyholders.

Essentially, insurance scores help predict future behavior and risk based on past data, making them a valuable tool in determining insurance premiums and coverage options. This predictive measure combines various factors, predominantly the applicant's financial responsibility as tangibly demonstrated through their credit score. The use of insurance scores reflects an attempt by insurers to mitigate losses and ensure that they are pricing policies appropriately based on the predicted risk of the insured party.