MSE News: Insurance costs to soar as gender discrimination banned

Premier_2

lisyloo wrote: »

A car is optional.
An annuity is currently not optional, so if you don't want to live on benefits when your retire then it's mandatory AND far more significant as it's your income not just a bill.

Annuities are only mandatory for those who have a pension pot to invest.

It is optional whether people decide to pay into such a pension pot in the first instance.

lisyloo

Annuities are only mandatory for those who have a pension pot to invest.

Correct.
That's why I said "unless you want to live on benefits".
I did actually forget the fact that some peoplem may chose to use other investments, so thanks for that.

It is optional whether people decide to pay into such a pension pot in the first instance.

Yes it is. Technically that's correct.
Howver some of us would have to forego 5% or more contributions from our employers if we chose not to.
I've had employer contributions for 20 years, so I don't think that's a viable choice for me.

I guess we coudl agree that's it's as optional as a car for some people.
i.e. it's technically optional but not a very good choice at all (or at all viable) for some people.

The fact remains that car insurance is just a bill, whereas an annuity is intended to provide an income for a significant part of your life.
Therefore my view is that the media is not focussing on the real issue here.
I realise that discriminatory higher car premiums for men will sell more papers than income in retirement stories.

tacotaco

lisyloo wrote: »

A car is optional.
An annuity is currently not optional, so if you don't want to live on benefits when your retire then it's mandatory AND far more significant as it's your income not just a bill.

EVERYTHING is optional, including annuity. As it happens, the only product I am paying for that is affected will result in a reduction of premiums.

SnowMan

One of the real nasties is that it will discourage people from taking out insurance or pensions when it might otherwise have been a good idea to do it. So we will see people not protecting themselves and their families when protection is needed. We will see males not taking out pensions and females not taking out term assurance.

Currently if I am looking to invest in a pension, I may or may not decide to do that. However after this decision whether I will will invest in a pension will depend on my sex. If I am female I might decide to do so. If I am male I might not on the basis that I am not going to get value for money from it at retirement when I have to take an annuity subidised by females.

If I am thinking of taking out term assurance I might do so if I am male but not if I am female, on the basis that if I am female I am not getting value for money as I am subsidising males. As less females take out term assurance the rates move towards the male rates and even less females take out term assurance.

Having to take a different decision on whether to have a pension or take out term assurance, depending on whether I am male or female feels like discrimination hitting me with full force. So the changes introduce sex discrimination not eliminate it.

Percy1983

Happy days, no penis premium tax on my car insurance.

The way I see it is to say there is only 2 types of people in the world is a bit short of the mark, right now they assume all males and all females are the same to which it is quite simply not true. If my premiums drop is another question, but knowing a proven dangerous female driver won't be getting a cheaper quote will make me feel better.

Underwriter

MacMickster wrote: »

Sorry, but but it is you who doesn't have a clue. The ruling was about gender, NOT age, so will have no impact on the examples you have quoted.

Why don't you go back to post #10 and #14 which is what I was replying to, and therefore what you were commenting on, it was the "logical" step towards banning premiums based on age I was talking about.

I've been living and breathing this ruling since it was put forward in September, so I actually do know what I'm talking about, and I also know what I'm talking about when it comes to age discrimination being brought into this whole fiasco.

I won't hold my breath for an apology.

Rupert_Bear

Brilliant. Does that mean we can all be Sheilas irrespective of gender.

wozearly

SnowMan wrote: »

One of the real nasties is that it will discourage people from taking out insurance or pensions when it might otherwise have been a good idea to do it.

I'm not sure that's necessarily correct in the round. Intuitively, the 'winners' from the change are now more likely to take out insurance/pensions as the prices will now be more affordable.

Whether there are more losers than winners is a bit of a moveable feast, as that depends on what insurers do, but I wouldn't personally expect this to be the biggest problem.

Martin's blog post (can't link directly, I'm still a 'new' user) was really good on this angle.

Where gender is actually a defining characteristic due to biology (e.g. women live longer on average) then insurers no longer being able to use this as a risk factor will mean there is an element of forced cross-subsidisation from the low risk group to the high risk group.

In other areas, its less clear cut. for example, men may claim more on average for car insurance, therefore considering all men higher risk and charging them more is reasonable from an actuarial perspective but may be a 'lazy' way to identify risk if the real reasons are partly or fully behaviourally driven (e.g. men tend to drive more expensive cars, drive more miles on average, etc.) rather than biologically (e.g. men are innate worse/riskier drivers).

I have similar views to Martin on this - I feel that if gender (or age, or race, or whatever factor you care to choose) is the direct cause of a change in risk, it makes sense to charge for it. If it just happens to coincide with other factors that are driving the risk then using it as a pricing factor would be discriminatory.

Ironically, this is pretty much what the previous ruling had put in place...:cool:


The big question for now is whether insurers will start to reweight the way they assess risk to more clearly identify the drivers of risky/expensive behaviour and create new risk pools that don't use gender, or whether they'll simply remove gender from their weighting criteria and rebalance the prices accordingly. Due to risk selection, this second approach is unlikely to mean that premiums will meet comfortably in the middle - they're more likely to meet closer to the current 'high risk' premium point.

Guess we'll see in a year and a half or so.

bert&ernie

lisyloo wrote: »

Men are biologically programmed to be competitive amongst other males whether it's resources (food) or females they are competing for.

Those are factored into statistics and further more will also be taken into consideration along with gender (which is a major factor but not the only one).
So for example if you are overweight or smoke then that will increase your premium.

Even if your first statement were demonstrably true, which I don't think it is, it still doesn't explain differences in car issuance claims or life expectancy.

Biological determinism has long been used as an excuse to discriminate between men and women, and a lot of it is !!!!!!!!.

Some lifestyle choices are indeed taken into account directly, but my point is that differences in outcome attributed to sex are actually not biologically determined, but rather that they are influenced by social factors. In insurance, you pay for or benefit from the typical lifestyle choices of those with the same gender.

There may well be some biological influence on life expectancy, but you can't attribute the entire difference to this factor

ashleypride

huckster wrote: »

There has been a long debate on this subject with arguments on either side.

I am of an age where gender does not affect my premiums, but I do feel sorry for younger male drivers, when they are quoted several thousand pounds more a female of the same age. You could have twins aged 18, one boy and one girl, both having identical cars, living at the same address etc, but one is charged a lot more than the other, just because biology has made them a male. This is clearly discrimination.

I do understand the arguments your make about rating being based on statistics, but I do think there must be a limit applied to how statistics are used. Ultimately courts will decide and they have done so, so I suppose the debate is irrelevant.

Would you be saying the same, if they removed the age 'discrimination' and your policy becomes massively inflated as you'd have to pay for all the young males accidents?

The more a insurer knows about you, the more accurate the stats they use to assess your risk, with the law of averages the policy you pay becomes much fairer to you as it represents the real risk factor.

Young people pay more because they have less experience. Young males pay more because of there biology - testosterone. (Older males pay more than females for less direct biological reasons which is more debatable.). This isn't discrimination this is common sense!

Chances are, the insurances compaines will start loading up premiums for higher category cars, and charging more for mods. Which probably isn't a bad thing.