Making the statistical model for E(claims) worse on purpose by excluding relevant features (e.g. inherent traits) is political. The insurers have no choice since the ethical views of the majority are hoisted upon them through politics. The causal path has its roots in an ethical conversation that has played out in public, but this has mediated itself through politics/legislation.
The crime analogy is inappropriate. Insurance is a private voluntary arrangement between two consenting entities. Convictions on the other hand are an involuntary imposition on an unwilling party.
One could make the argument that allowing inherent traits in the pricing of insurance is the less authoritarian and more utilitarian option, since it is less forceful state interference in private business and leads to more accurate claims pricing and less subsidisation of insurance for person A by person B. Your prison sentencing analogy on the other hand implies more force, which is why I don't view it as a valid analogy.
The ethical argument can go either way depending on the axioms we pick a priori. If we pick Libertarian deontological axioms, then the ethical choice is to allow inherent traits into the model. If we pick racial equity deontological axioms, then we get another conclusion.
The crime analogy is inappropriate. Insurance is a private voluntary arrangement between two consenting entities. Convictions on the other hand are an involuntary imposition on an unwilling party.
One could make the argument that allowing inherent traits in the pricing of insurance is the less authoritarian and more utilitarian option, since it is less forceful state interference in private business and leads to more accurate claims pricing and less subsidisation of insurance for person A by person B. Your prison sentencing analogy on the other hand implies more force, which is why I don't view it as a valid analogy.
The ethical argument can go either way depending on the axioms we pick a priori. If we pick Libertarian deontological axioms, then the ethical choice is to allow inherent traits into the model. If we pick racial equity deontological axioms, then we get another conclusion.