Empirical Evidence on the Use of Credit Scoring for Predicting Insurance Losses with Psycho-social and Biochemical Explanations

An important development in personal lines of insurance in the United States is the use of credit history data for insurance risk classification to predict losses. This research presents the results of collaboration with industry conducted by a university at the request of its state legislature. The purpose was to see the viability and validity of the use of credit scoring to predict insurance losses given its controversial nature and criticism as redundant of other predictive variables currently used. Working with industry and government, this study analyzed more than 175,000 policyholders’ information for the relationship between credit score and claims. Credit scores were significantly related to incurred losses, evidencing both statistical and practical significance. We investigate whether the revealed relationship between credit score and incurred losses was explainable by overlap with existing underwriting variables or whether the credit score adds new information about losses not contained in existing underwriting variables. The results show that credit scores contain significant information not already incorporated into other traditional rating variables (e.g., age, sex, driving history). We discuss how sensation seeking and self-control theory provide a partial explanation of why credit scoring works (the psycho-social perspective). This article also presents an overview of biological and chemical correlates of risk taking that helps explain why knowing risk-taking behavior in one realm (e.g., risky financial behavior and poor credit history) transits to predicting risk-taking behavior in other realms (e.g., automobile insurance incurred losses). Additional research is needed to advance new nontraditional loss prediction variables from social media consumer information to using information provided by technological advances. The evolving and dynamic nature of the insurance marketplace makes it imperative that professionals continue to evolve predictive variables and for academics to assist with understanding the whys of the relationships through theory development.IC2 Institut

Handgun carrying among white youth increasing in the United States: new evidence from the national survey on drug use and health 2002–2013

The objective of the present study was to examine trends and correlates of handgun carrying among adolescents ages 12–17 in the United States. Data was derived from the National Survey on Drug Use and Health (NSDUH) involving non-Hispanic White, African American, and Hispanic respondents ages 12–17 (n = 197,313) and spanning the years 2002–2013. Logistic regression was used to examine significance of trend year and correlates of previous 12-month handgun carrying. The overall self-reported prevalence of handgun carrying was 3.4%. The prevalence of handgun carrying during 2004–2005 was significantly higher for African-Americans (4.39%) compared to non-Hispanic Whites (3.03%). However, by 2012–2013, non-Hispanic Whites (4.08%) completely diverged and reported carrying handguns significantly more than both African-American (2.96%) and Hispanic (2.82%) youth. Male gender and a number of externalizing behaviors were significant correlates of handgun carrying; however, we also found evidence of differential correlates with regard to such factors as drug selling, parental affirmation, and income by race/ethnicity. To our knowledge, this is the largest study of handgun carrying among youth in the United States. Findings indicate that although at historically low levels handgun carrying is on the rise but only among non-Hispanic Whites. Differential correlates among racial/ethnic groups suggest prevention programming and policies may need modifications depending on group and geographic locale targeted.R25 DA030310 - National Institute on Drug Abuse at the National Institutes of Healt

Interactions between empathy and resting heart rate in early adolescence predict violent behavior in late adolescence and early adulthood.

BackgroundAlthough resting heart rate (RHR) and empathy are independently and negatively associated with violent behavior, relatively little is known about the interplay between these psychophysiological and temperament-related risk factors.MethodsUsing a sample of 160 low-income, racially diverse men followed prospectively from infancy through early adulthood, this study examined whether RHR and empathy during early adolescence independently and interactively predict violent behavior and related correlates in late adolescence and early adulthood.ResultsControlling for child ethnicity, family income, and child antisocial behavior at age 12, empathy inversely predicted moral disengagement and juvenile petitions for violent crimes, while RHR was unrelated to all measures of violent behavior. Interactive effects were also evident such that among men with lower but not higher levels of RHR, lower empathy predicted increased violent behavior, as indexed by juvenile arrests for violent offenses, peer-reported violent behavior at age 17, self-reported moral disengagement at age 17, and self-reported violent behavior at age 20.ConclusionsImplications for prevention and intervention are considered. Specifically, targeting empathic skills among individuals at risk for violent behavior because of specific psychophysiological profiles may lead to more impactful interventions

Non-suicidal self-injury in adolescence: a longitudinal study of the relationship between NSSI, psychological distress and perceived parenting

Objective: The present study investigates whether either adolescents' psychological distress and/or perceived parenting predicted the occurrence of NSSI. Furthermore, the consequences of NSSI are examined in a three-wave longitudinal study. Design: The sample at time 1 (age 12) consisted of 1396 adolescent reports and 1438 parent reports. At time 2 (age 13), 827 adolescent reports and 936 parent reports were obtained. Time 3 (age 14) included 754 adolescent reports and 790 parent reports. Psychological distress of adolescents was measured using the Strengths and Difficulties Questionnaire. Perceived parenting behaviors were examined by the Parental Behavior Scale and the Psychological Control Scale. Results: A total of 10% of the adolescents engaged in NSSI at least once before age 15. Higher psychological distress of adolescents at time 1 was associated with the presence of NSSI at time 2 or 3. The association between psychological distress at time 1 and perception of decreased parental rule setting at time 3 was mediated by the presence of NSSI at time 2. Conclusions: The present study showed that psychological distress at age 12 predicts NSSI over time and that parental awareness of NSSI changes the perception of parenting behaviors. (C) 2014 The Foundation for Professionals in Services for Adolescents. Published by Elsevier Ltd. All rights reserved