MSE News: Insurance costs to soar as gender discrimination banned

Velcro_Hotdog

Its a ball ache that as a man I have to pay more because money is tight enough as it is, what gets me though is that young drivers with no, no claims or experience learn to pass there test and do not learn to drive.

When I passed my test I jumped into my car and nearly crashed on more than one occassion because there was no instructor there to tell me what I was supposed to do

If the driving lessons and test were more difficult and included driving in adverse conditions then perhaps younger drivers would be less likly to crash and the insurance premiums come down. I now have 6 years no claims and would now say I'm a confident driver, the first 6 month to a years no claims were probably down to look as I was still learning the un written rules of the road.

MacMickster

Underwriter wrote: »

Well you'd better hope and pray that we do because if not, that is the end of the life insurance industry, and I'm not exaggerating.

Oh yes you are exaggerating! Do you really think that no-one will be able to buy a life insurance policy after December 2012? If so, I think your judgement must be called into question (which is what the ruling has actually done).

The risk will be shared equally by all insured regardless of their sex (also race and religion).

Unfortunately, the main risk to the consumer will be profiteering by the insurance companies. The total level of claims and payouts will remain the same, but I'd guess that, initially at least, companies will use this as an excuse to increase their premiums (and hence profits) across the board. Eventually, however, a few will break ranks and offer competetive premiums to increase market share.

king100

So you cant discriminate against sex

What next

Age
Postcode
What car I drive

Joke, its down to statistics young male drivers more accidents simple.

Cuff

I thought the whole point of insurance was to 'discriminate' higher risks as generally borne out by the statistics and reflect that in the cost. The only 'winners' in this (if any) are those who should be paying more anyway.

What's next premiums not allowed to differ due to age because that's ageism?!!!

lisyloo

There is a big difference between age and sex disrimination.

It is generally true that as you get older you have less life left to live.
There are of course exceptions (like you might lose weight or give up smoking) but these are also taken into account by insurance.
It's one of life certainties that we are all using up our life as we live it. This is an undeniable fact.

What people are claiming is unfair (and I'm not making a personl judgement here) is that just because you are a womabn or a man does not necessarily mean you as an individual are a more/less expensive driver in terms of accidents.
However we are ALL getting closer to out deaths as we age - FACT.

So I see a big difference here betweeen these two types of discrimination.
I'm not making a comment on whether sex discrimination is OK, just stating that there is a difference between age and sex so one does not follow from the other.

bert&ernie

Martin says:

"However, in the main it is ludicrous. Most cost differences are because women live longer, that's not bias it's biology and there is nothing wrong with factoring that into quotes. For example, it means women get better annuity rates but worse life term assurance costs."

I'm surprised that you are so certain that the difference is life expectancy is biologically determined. Have you considered that socio-economic factors might have a significant impact on this?

tacotaco

As a young driver, I was always angered :mad: by the fact that two of my close female cousins, who both had a history of speeding around and knocking into things, were paying far less than I was for insurance when I was "obviously" the safest driver on the road. Now, many years later, I think some of that anger was justified. In fact I am quite disgusted when I tally up the cost of premiums I've paid in my life (+£20,000) to the for-profit motor insurance industry and realize that the only payout I've ever received was for the replacement of a single cracked windscreen. :eek:

Nevertheless, the statistics do not lie. The insurance industry is absolutely correct to state that statistically speaking, as a male I am a riskier/costlier driver than the average female. But this is only true because they have grouped me with a lot of bad drivers. It is most definitely discrimination by gender, and discrimination by gender is illegal.

But as it has been stated, the insurance industry cannot operate without certain discrimination. If there were not laws against racism then quite probably they would be grouping the good drivers from a particular background with their compatriots who have recently immigrated but are still driving according to the rules in their home country. Discrimination by race is illegal, and so this is not done - at least not directly. We know that discrimination by postcode can inadvertently discriminate by race.

In the ideal world, your motor insurance cost would be based on your instantaneous risk and change on a millisecond basis. It would factor in your present level of awareness, your current physical condition, your current location, the current conditions of the vehicle you are driving, your historic driving habits, etc. This sort of thing is only possible in Orwell's world, which is not so ideal at all. So we are stuck with discrimination.

And so the line must be drawn as to what is acceptable discrimination and what is not, and the EU has said that gender discrimination is also no longer allowed in the industry. Big deal. This type of ruling is always going to negatively affect one group and positively affect another. I'm in the positive group, so I am not upset - I am glad that things will be a little fairer for me.

pinkteapot

tacotaco wrote: »

And so the line must be drawn as to what is acceptable discrimination and what is not, and the EU has said that gender discrimination is also no longer allowed in the industry. Big deal. This type of ruling is always going to negatively affect one group and positively affect another. I'm in the positive group, so I am not upset - I am glad that things will be a little fairer for me.

You're positively affected by the impact on car insurance. You're negatively affected by the impact this will have on pensions. Unless someone with some sense overturns this before you retire.

Info on the pension impact - http://www.thisismoney.co.uk/pensions/article.html?in_article_id=524067&in_page_id=6

What does this mean for MEN?

Lower payouts. Simple as that. Insurers can't afford to increase women's annuity rates in line with men's – that'd cost them too much.

Experts are divided about the exact impacts. It really depends on how insurers react – and that's an unknown as yet. Estimates range between 3% and 13% chopped off a pension. It is expected to be near the lower end of this scale.

Even if rates take just a 5% hit, a 65-year-old man with a £100,000 pension pot would be £8,300 worse off by the time he is 90 under a unisex policy.

Men currently pay less than women for health insurance, so your costs there will rise.

smk77

Velcro_Hotdog wrote: »

If the driving lessons and test were more difficult and included driving in adverse conditions then perhaps younger drivers would be less likly to crash and the insurance premiums come down. I now have 6 years no claims and would now say I'm a confident driver, the first 6 month to a years no claims were probably down to look as I was still learning the un written rules of the road.

You can make the test as hard as you want it will not make much difference to the stats.

The test simply means that the person is able to drive a car. You should know yourself that you only really learn how to drive properly after passing the test. You can't beat experience gained from just driving around on your own.

Underwriter

MacMickster wrote: »

Oh yes you are exaggerating! Do you really think that no-one will be able to buy a life insurance policy after December 2012? If so, I think your judgement must be called into question (which is what the ruling has actually done).

The risk will be shared equally by all insured regardless of their sex (also race and religion).

Unfortunately, the main risk to the consumer will be profiteering by the insurance companies. The total level of claims and payouts will remain the same, but I'd guess that, initially at least, companies will use this as an excuse to increase their premiums (and hence profits) across the board. Eventually, however, a few will break ranks and offer competetive premiums to increase market share.

I'm not exaggerating. At the moment a 20 year old will pay less than a tenner for £100k of life cover because they are on average healthier and have a longer life expectancy. A 70 year old will pay about 10x that amount at least (there are a number of factors so dont' quote me on accuracy) also assuming both are currently clean (ie no medical conditions) lives.

So how would you set the premiums? You obviously don't work in the industry as your final paragraph proves, and neither do you have a clue about actuarial calculations.

So I will be interested to see your answer, then I'll tell you why you are wrong, and why insurance companies can't survive.