This note investigates fairness in insurance pricing, focusing on two complementary notions: proxy discrimination and demographic parity. Proxy discrimination arises when apparently neutral risk factors encode information about protected attributes, leading to indirect and often unintended discrimination. Demographic parity, by contrast, is a group fairness criterion requiring the distribution of premiums to be independent of protected characteristics. We discuss the conceptual differences between these two approaches. Building on recent contributions of Simon, Denuit and Trufin (2025), we then describe tree-based methods (the DPTree and its ensemble extension, the DPForest) that embed demographic parity constraints directly into predictive models. These methods demonstrate how fairness requirements can be operationalised transparently within standard actuarial tools, while also illustrating the inherent trade-offs between accuracy and fairness.
Keywords: Insurance pricing; fairness; proxy discrimination; demographic parity; tree-based methods.
Sector: Insurance
Expertise: Tarification
Authors: Michel Denuit, Thomas Hames & Julien Trufin
Publisher: Detralytics
Date: November 2025
Language: English
Pages: 25
Reference : Detra Note 2025-5
Michel is a Scientific Advisor at Detralytics, as well as a professor in actuarial science at the Université Catholique de Louvain. He has international experience as a visiting professor, and has promoted many projects in collaboration with the industry. At Detralytics, Michel coaches young talents, provides cutting-edge training, fosters innovation and oversees R&D projects.
Depuis son arrivée chez Detralytics en 2019, Thomas a principalement travaillé sur des sujets de tarification et de provisionnement en assurance Non-Vie et Automobile de détail, en combinant des méthodes classiques avec des approches basées sur le machine learning.
Par ailleurs, en interne, Thomas participe au développement technique et commercial de notre package de micro-provisionnement et assure la supervision des projets de notre Innovation Lab.
Julien est Scientific Advisor chez Detralytics et Professeur en sciences actuarielles au sein du département de mathématiques de l’Université Libre de Bruxelles. Il possède une expérience en tant que consultant et un solide parcours académique développé au sein d’institutions de renom, dont l’Université Laval (Canada), l’UCL et l’ULB (Belgique). Chez Detralytics, Julien encadre les jeunes talents, dispense des formations de pointe, stimule l’innovation et supervise les projets de R&D.