Is it fair to discriminate on age, gender or race in insurance pricing?

Former_MSE_Debs

Poll started 9 Oct 2012

In December the European Court of Justice 'gender equalisation' rule hits, meaning insurers can no longer charge men and women different prices (other things being equal). It'll mean hikes in car, life and medical insurance for women, and worse annuity rates for men.


Which of the options in this week's poll SHOULD BE ALLOWED to factor into pricing?

Vote in this week's poll

Did you vote? Why did you pick that option? Are you surprised at the results so far? Have your say below. To see the results from last time, click this

DdraigGoch

I can't vote as the answer I'd pick would be:

Discrimination based on experience.

So, if you're a good and responsible 18 year old male driver you get a lower premium than a 45 year old irresponsible female driver, etc. That's how insurance policies are supposed to work.... but they never do because "averaging" or other similar presumptions have to/do take place as soon as your name and declaration of age/gender hit the form.

Cynical, moi?

socks_uk

I'm a 48 year old woman and I've been driving for 26 years.

The only accident I have been involved in was when I was reversed into, at high speed, by a stolen car being driven by a teenage lad with 2 passengers, who was trying to get away from a police car who had just spotted them!

I wonder how much more I'll end up paying in premiums?

thelem

It wouldn't let me select "all of the above" (max 5 of 6 options).

Insurers build up a risk profile based on various factors, including those mentioned. If there is a higher claim history amoung a particular group (however that group is defined), then it is reasonable for that group to pay a higher premium. I'd support an appeal system though, where an insurer would have to defend why those groups attracted a premium.

If you don't like everyone paying for their risk, then make the policies unnecessary by having the government provide the services, funded by general taxation. Or possibly force insurance companies to sell a certain percentage of policies with no means testing - which would effectively put a cap on premiums for riskier people.

Why would there be difference in claims? It's not necessarily important if insurers have a claims history that shows there is, but here are some suggestions:

Gender - Male drivers are more likely to have an accident caused by speed. Women are more likely to have pregnancy-related health problems.

Sexuality - Differences in rates of STIs, drink and drugs may affect health insurance.

Race - There are well documented differences in healthcare / common complaints amoungst different ethinc groups.

Age - Obviously huge differences in healthcare and chance of death, but also attitude to risk.

Disability - This will be very specific to the disability in question, and I suspect in many cases a disability would decrease the risks, but maybe people who are deaf or blind in one eye are more likely to have a car accident? (maybe they aren't, but they insurance companies will have the data to back that up).

Religion - Maybe your religion teaches against the use of condoms, increasing the spread of STIs. Maybe they teach abstinance, reducing the spread of STIs.

Obviously there are many other reasons, and for anyone who is having their quote increased others will be getting a lower quote. It's also not a minority vs majority thing - the minorities should be just as likely to be the ones benefiting as they are suffering.

MrsUniverse

I am absolutely outraged by this European directive. When is there going to be a directive for equality for women in the workplace? When are we going to get equal pay and equal treatment? When are we going to get equal opportunities?

How dare they use the equality card to make money and increase insurance premiums for women? And largely I have to say this is to pay for the chaos that men cause on the roads. I know men in their 40's with over 30 points on their licence and direct debits to local courts to pay for speeding fines.

:mad:

BNT

It's not discrimination, at least not in the sense of treating people differently for no valid reason. It's just risk assessment.

Typo22

MrsUniverse wrote: »

When is there going to be a directive for equality for women in the workplace?

And when is there going to be a directive to stop men dying years earlier than women? Sheesh.

BNT

MrsUniverse wrote: »

I am absolutely outraged by this European directive. When is there going to be a directive for equality for women in the workplace? When are we going to get equal pay and equal treatment? When are we going to get equal opportunities?

How dare they use the equality card to make money and increase insurance premiums for women? And largely I have to say this is to pay for the chaos that men cause on the roads. I know men in their 40's with over 30 points on their licence and direct debits to local courts to pay for speeding fines.

I think the ruling is misguided, but I think you are misreading the impact. Women will pay more for some things (e.g. motor insurance) and less for others (e.g. medical insurance). Who pays what will depend on what insurance you have and who your insurance is with, and I have no idea what the overall change in costs will be. However, this is not a case of using the equality card to increase premiums for women.

bitemebankers

Age is okay but experience would be better (this is what the insurance companies actually use).

The 421 people who clicked "Race" or "Sexuality" should be hunted down and kicked out of the country. You are not fit to live in a civilised society.

N.I.M

bitemebankers wrote: »

Age is okay but experience would be better (this is what the insurance companies actually use).

The 421 people who clicked "Race" or "Sexuality" should be hunted down and kicked out of the country. You are not fit to live in a civilised society.

I didnt click on them and dont believe they should be considered...HOWEVER, I work with stats, not in insurance mind, and I can see why these could be considered under certain circumstances.

Some races are genetically predisposed to certain illnesses. For the ske of argument say Irish people were more predisposed to developing liver issues for reasons unrelated to alcohol consumption, no idea if we are or not but just as an example, then insurers would charge the irish a premium to cover them for liver related illnesses. Or is that racist?

bitemebankers

N.I.M wrote: »

For the ske of argument say Irish people were more predisposed to developing liver issues for reasons unrelated to alcohol consumption, no idea if we are or not but just as an example, then insurers would charge the irish a premium to cover them for liver related illnesses. Or is that racist?

I wouldn't say it's racist because I don't think the Irish are a distinct ethnic group, but it's certainly discriminatory.