Should Insurance Be Sexless - Martin's Blog & Site Vote

wozearly

psdie wrote: »

For example, why is it illegal to reflect in salaries the fact that women can take up to 39 weeks' maternity leave, during which she continues to accrue pension and holiday entitlement?

In both cases it seems somewhat "equality for equality's sake" rather than commonsense? {be gentle! }

Its not womens' fault that the current system is very one-way. Fathers don't have an equal ability to take 39 weeks paternity leave on the same basis in order to fulfill the same (well, okay, highly similar) family role. If you look at it purely from a company's point of view, men are currently unable to cause a similar 'burden'.

As a result, it would be harsh to penalise women for the way the law is set up. Therefore it being illegal to discriminate on salaries is, in my opinion, sensible. Amending salaries would also be incredibly harsh to any women who didn't want children...

wozearly

tbourner wrote: »

I don't think it needs to be Big Brother though. If you don't give them your theory and practical test results you get put onto 'default' risk, they can get history of accidents easily enough so you can't lie about that, and they would be able to get your mileage at the end of the year to check you weren't way out on your estimates.

Problem is that these aren't the be-all and end-all indicators of risk. Past performance is not a perfect predictor of future accident potential, or the costs this might incur.

Someone could ace their theory and practical, do PassPlus, drive for three years with no accidents...and then the following day make an error of judgement and cause an accident resulting in a massive claim.

Insurers don't have a perfect view of us, but they do have a very good view of what happens to groups of people with certain characteristics, and this is how they price - so that for each group they can charge a premium that on average covers the costs of the claims made by the entire group.

Unfortunately from an individual perspective, the claimants tend to 'win' by a significant margin where the insurer could have got away with charging the non-claimants next to nothing. If the insurers could more accurately predict who would be which, believe me, we'd know it.

Insurers don't have a reason to ignore information that would allow them to isolate lower risk / higher risk drivers and offer them more accurate premiums. Doing so will ultimately improve their profitability given how open minded people are to switching insurers that offer them a better rate.

As Kimbalena says, we could help as individuals if we gave insurers missing information that would help them - a set of cameras in the car that recorded you and your driving and noted down how many times you were talking on a mobile, signs of road rage, jumping red lights, cutting other people up, speeding, etc. would probably do a heck of a lot to get you a more accurate individual premium (for better or worse).

However, even if insurers were able to do that with some whizzy technology, I'm not sure people would necessarily want to sign up for it...

tbourner

carrielovesfanta wrote: »

surely insurance statistics are based on the details of claims and payouts, not based on every person in the country, whether they are currently driving or not?

If your mum hasn't driven in 35 years, they wouldn't add her into the stats as a safe person who doesn't have accidents!

She won't be part of insurance databases, but she'll be on DVLA records as holding a driving licence and not having any accidents, and that's where I assume insurance regulators get their facts and figures from. Maybe I'm wrong though.

carrielovesfanta wrote: »

As for how far someone drives, that is taken into account in your quote (at least I alway have to enter those mileage details!) so whether you are a man or a woman, if you drive less, it will be cheaper than if you do 20k a year.

It's not though. Try it! Get some quotes and change the things you think will affect the premium. I bet none of them change it as much as changing sex or age!! Going from fully comp to 3rd party usually puts the quote UP!! It's insane.

wozearly wrote: »

Problem is that these aren't the be-all and end-all indicators of risk. Past performance is not a perfect predictor of future accident potential, or the costs this might incur.

Someone could ace their theory and practical, do PassPlus, drive for three years with no accidents...and then the following day make an error of judgement and cause an accident resulting in a massive claim.

If I had 100 men who fit the above description, and 100 random girls who've been driving for 3 years - I'd much rather take the chance on the 100 blokes, regardless of whether 1 or 2 go and have a nasty accident the next day, it's a much lower risk than the 100 girls with no history!

Tojo_Ralph

.....

If we agree that gender should be a factor when accessing risk and reward, should we not do away with the recently introduced equality act that seeks to "harmonise existing discrimination laws and give men and women the right to equal pay for equal work"?

If statistics proved that men were less likely to be off sick, less likely to leave to raise a family, more likely to work longer hours unpaid, less likely to be dependant on childminders, more likely to commit to a long term career, etc, etc ..... Should employers not be permitted to pay them more?

wozearly

tbourner wrote: »

She won't be part of insurance databases, but she'll be on DVLA records as holding a driving licence and not having any accidents, and that's where I assume insurance regulators get their facts and figures from. Maybe I'm wrong though.

Most insurers will ultimately use a mix of their own information and information available from other sources, although my belief is that they'll tend to prefer their own observed information/statistics when pricing as these are directly linked to the claims they paid out.

As an example, if the majority of women on the DVLA records were like your mum, then it'd be a pretty poor indicator of risk as it would show women were amazing drivers that never crashed compared to insurers' own records that would show that they do crash on a regular basis. If it was that out of kilter, insurers would be likely to ignore DVLA data entirely.

tbourner wrote: »

If I had 100 men who fit the above description, and 100 random girls who've been driving for 3 years - I'd much rather take the chance on the 100 blokes, regardless of whether 1 or 2 go and have a nasty accident the next day, it's a much lower risk than the 100 girls with no history!

Heh...you'd think, wouldn't you. There could be a number of reasons why insurers haven't followed that strategy, though. As a few examples:

There might not be enough data to be conclusive about the effect on risk - I believe relatively few people take advanced driving courses compared to the overall driving population.

These factors may not reflect a genuinely lower risk. If you look at instructors that offer PassPlus, many boast of 90%+ success rates. That *may* indicate that drivers who do it are generally good drivers. It might also indicate that if the average driver took it then they'd pass. Or even a below average driver. If that was the case, it wouldn't be much use as a distinguishing factor and the effect on premiums would be small.

The same could be true of how many minors someone picks up in their test - the difference over a lifetime's worth of driving experience and claims between someone with one minor and seven minors may be small. It might be more reflective of how much driving experience someone had pre-test, not necessarily their overall skill as a driver.

Linked to this, they're time and situation-specific. Its a test of someone's ability at a specific moment in time, when they know they're being assessed. How people drive outside of those situations may not necessarily be at the same standard...and we spend far longer on the roads without an instructor watching us.

That point leads to the final one I'll make. If an insurer gave, say, a 50% discount for people who'd got PassPlus then fairly savvy boy races will spot that if they go through the motions and do PassPlus then they'll save themselves a fortune in car insurance, even if they have no intention of driving any differently afterwards.

This is known as anti-selection risk, and the insurer affected by this would suddenly find that they were paying out a lot more in claims than they expected from this array of apparently trustworthy young male drivers. After losing a ton of money, they'd have to hike premiums up to reflect the reality of the claims risk their customers presented as a whole.

maddypc

I agree 100%! Are they going to increase charges for over 21s to match the 17 year old first time drivers on the grounds that it is agist? If the premium calculation is based on facts, and risks, rather that predjudice then it seems common sense to charge the gender who have less accidents a smaller premium!

kaz0705 wrote: »

I worked for a car insurance company at uni and I was under the impression that it was the 'risk' aspect that was the problem rather than the gender.

So, for instance (using made up stats!):

Postcode A - 60% car claims are theft
Postcode B- 30% car claims are theft

The insurance premium would consider postcode A as higher risk. Now, I'm entirely for equal rights- it's a key issue for my life but as far as I was aware the premium weren't based on discrimination but on evidence:

Gender A/ under 25= 80% of claims for crashes (at fault)
Gender B/ under 25 = 65% of claims for crashes (at fault)

So, whilst I can understand, theoretically, why it's bad to place a higher premium based on gender, I don't get why it's not based on *risk* factors, as all insurance should be?

Surely car insurance is based on: Type of car + postcode + age + previous claims + gender + and so on?

In which case, why isn't age being defined as discriminatory? Why is it ok to say that under 25s have more crashes than over 25s but it's not ok to say men have more crashes with women?

I am genuinely confused by this!

Googlewhacker

Tojo_Ralph wrote: »

.....

If we agree that gender should be a factor when accessing risk and reward, should we not do away with the recently introduced equality act that seeks to "harmonise existing discrimination laws and give men and women the right to equal pay for equal work"?

If statistics proved that men were less likely to be off sick, less likely to leave to raise a family, more likely to work longer hours unpaid, less likely to be dependant on childminders, more likely to commit to a long term career, etc, etc ..... Should employers not be permitted to pay them more?

Exactly and whilst we are at it, ban same sex gyms as well, ban charity events that are for only one sex, ban clubs from allowing one sex in for free, ban same sex clubs etc

If things are to be equal it works both ways.

michaels

I don't know what is more disappointing, this ruling or the fact that the general population and the media in particular have such a poor understanding of statistics that they do not realise how stupid this is.

I would suggest that all the male drivers on this thread who claim that their premium is too high should go and start their own insurance company undercutting the cheapest premiums they are currently quoted and start counting their profit as obviously current premiums are so unfairly high

A final thought - current high premiums for young male drivers price some off the roads, any reduction in premiums as the result of this ruling will increase the number of young male drivers and thus lead to more deaths

SeaBeeUK

It's all academic now. The judges have decided that risk adjusted insurance is illegal if the risk adjustment is based on sex. We can now look forward to a ban on risk adjustment for age, risk adjustment for post code (some postcodes have a higher proportion of ethnic minorities and risk adjustment will thus be deemed illegal on the grounds of potential race bias). Stupid laws from idiot judges in a half-baked legal system.

Loanranger

Tojo_Ralph wrote: »

.....

If we agree that gender should be a factor when accessing risk and reward, should we not do away with the recently introduced equality act that seeks to "harmonise existing discrimination laws and give men and women the right to equal pay for equal work"?

If statistics proved that men were less likely to be off sick, less likely to leave to raise a family, more likely to work longer hours unpaid, less likely to be dependant on childminders, more likely to commit to a long term career, etc, etc ..... Should employers not be permitted to pay them more?

The Equal Pay Act became law in 1970 and has been in force ever since.