1、MILLIMAN REPORT Fairness in UK health insurance Developing a framework and best practices in health insurance February 2025 Christine Fairall,FIA C.Act Nick Spencer,FIA MILLIMAN REPORT Table of contents EXECUTIVE SUMMARY.1 PART 1:DEVELOP A FRAMEWORK TO DEFINE FAIRNESS.1 PART 2:INTEGRATE INTO STRATEG

2、IES AND OPERATIONS.2 PART 3:EMBED ASSURANCE PROCESS.2 PART 4:HORIZON SCANNING TO REVIEW AND RENEW.2 CONCLUSION.3 OVERVIEW OF OUR PAPER.3 PART I:DEVELOPING A FRAMEWORK FOR FAIRNESS.4 WHAT IS FAIR?.4 REGULATORY EXPECTATIONS,ESPECIALLY CONSUMER DUTY.4 BEYOND THE REGULATIONS:ACCEPTABILITY,CORPORATE BRAN

3、D AND VALUES.6 DEVELOPING A FAIRNESS FRAMEWORK.7 PART 2:INTEGRATE INTO OPERATIONS.7 PRICING AND UNDERWRITING.7 MEDICAL UNDERWRITING.8 AI USAGE.8 PART 3:ASSURANCE PROCESS.10 ALGORITHMIC TESTING.10 CUSTOMER CLAIM JOURNEY.11 SOCIETAL INCLUSION.11 PART 4:HORIZON SCANNING.12 EU AND GLOBAL RULES,CONSUMER

4、GROUP CAMPAIGNS.12 TRUST,PERSONALISED MEDICINE,PRIVACY AND FAIRNESS.12 APPENDIX A:OVERVIEW OF THE FCAS CONSUMER DUTY.13 IMPLICATIONS FOR UK HEALTH INSURERS.13 APPENDIX B:VULNERABLE CUSTOMERS.14 APPENDIX C:THE EU AI ACT AND POTENTIAL GOOD PRACTICE IMPLICATIONS FOR UK INSURERS.17 SUMMARY OF THE EU AI

5、ACT.17 THE ACTS GOVERNANCE AND PRACTICE REQUIREMENTS FOR INSURERS.17 APPENDIX D:INTRODUCTION TO ALGORITHMIC BIASES AND TESTING.19 ALGORITHMIC BIASES.19 DIFFERENT APPROACHES TO FAIRNESS METRICS.19 INTEGRATING BIAS REMEDIATION INTO THE MODELLING PROCESS.20 ALGORITHMIC FAIRNESS LIBRARIES.20 MILLIMAN RE

6、PORT Fairness in UK health insurance 1 Developing a framework and best practices in health insurance February 2025 Executive summary While most people have their own definition of“fairness”,working out what is fair in health insurance is far from trivial.However,“fairness”is increasingly topical for