Causation, correlation, and coincidence
A significant portion of my career has been spent in the insurance industry. Insurers are intensely competitive and guard their underwriting methodologies like they are the formula for Coca-Cola or the secret recipe for Bush’s baked beans. They are always looking for the X factor that allows them to price their product more accurately and attract more customers.
As the Center for Truth in Science concentrates on issues at the intersection of science, justice, and the economy, insurers have their own core focus: distinguishing between causation, correlation, and coincidence.
Causation equates to a scientifically verifiable fact, or something that can be proven to be true. For instance, drivers with poor driving records—tickets, accidents—are more likely to be involved in accidents in the future.
Correlation is a less definitive connection. Insurers contend that drivers with poor credit scores are likely to file more claims than those with higher scores and they can demonstrate a correlation between credit scores and risk based on the loss experience of their policyholders. However, they are hard-pressed to demonstrate that poor credit scores have a causal link to future claims. As a result, states often place significant restrictions on the use of credit scores in underwriting.
Finally, there is coincidence. One insurer shared with me its firm belief that blue-eyed drivers had twice as many accidents as brown-eyed motorists. The problem? They could not prove this was any more than a coincidental link. You can guess what happened when they showed the “evidence” to regulators in an effort to have the factor incorporated into their underwriting formula. Suffice to say that there are no questions about eye color on any insurance applications in the United States.
In fact, regulators rejected the proposal immediately because it lacked one important feature: fact-based scientific evidence that definitively links eye color to future claims.
The Center for Truth in Science follows a similar train of thought. Evidence-based decision making should be incorporated as the gold standard of our judicial system, most especially where judicial decisions based on scientific research can have a significant impact on the economy.
By highlighting sound evidence based on independent, objective, tested, and replicated scientific research instead of questionable science that may be based on incomplete evidence, incorrect methodologies, or other flaws, the Center can help ensure the fairness of the justice system—for both plaintiffs and defendants—and that verdicts are based on facts instead of emotion.