Date of Completion

Spring 5-1-2026

Thesis Advisor(s)

Daniel Watt

Honors Major

Mathematics/Actuarial Science

Abstract

This paper examines whether gender remains an appropriate rating variable in the U.S. insurance industry. Gender has historically been used across several lines of insurance because it has demonstrated predictive value in areas such as mortality, claim frequency, and health utilization. However, the continued use of gender creates challenges as insurance systems attempt to accommodate individuals who do not fall within traditional male/female binary classifications.

The paper first reviews the current state of gender use in U.S. insurance, including examples from auto, health, life, and annuity markets. It then considers equity and ethical concerns, particularly the tension between actuarial fairness and social fairness. While gender may improve predictive accuracy, its use may also create operational and equity challenges for transgender and nonbinary policyholders.

The European Union provides an important case study. Following the 2011 Test-Achats ruling, insurers in the EU were required to use gender-neutral pricing for new contracts beginning in 2012. Evidence from the EU suggests that this transition has not caused widespread solvency deterioration.

This paper argues that a similar transition could be feasible in the United States through a coordinated regulatory framework. The proposed roadmap includes regulatory assessment, public rate impact exhibits, actuarial memoranda, model testing, data governance controls, and phased implementation. Ultimately, the paper concludes that gender-neutral insurance rating may improve fairness and consistency while preserving actuarial soundness if implemented carefully.

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