Insurance is one of the world’s most difficult products to price. Companies have to price it before they know its true cost over time—which can vary widely from customer to customer, based on personal and environmental factors unknown at the time of sale. Allstate’s pricing model does not consider ethnicity, race, nationality or income. Our goal is to match price to risk as accurately as we can, and our pricing model contains millions of price points.

Ultimately, insurance rates are determined by potential risk. When a customer requests an auto insurance quote, for example, several factors are taken into consideration. Driving record is one of them. But since driving records only paint a partial picture of the risk presented, we also consider the kind of car being driven, how much it’s driven, and other factors to determine an appropriate premium. Over the years, the insurance industry has developed increasingly sophisticated systems to tailor auto rates, including the use of information from a customer’s credit history. Using credit history enables us to offer lower premiums to many customers who otherwise would pay more for their insurance. The overriding principle is for those with a higher risk to pay more, and those with a smaller risk to pay less.