House/Contents Insurance Quote - Gender Differentiation?

flaneurs_lobster

https://forums.moneysavingexpert.com/discussion/comment/82060753#Comment_82060753

I'd agree that our 5-6 runs (over 24 hours) of the quote machine are hardly a significant sample but they were consistent - the older, female party always obtained lesser quotes.

j2009

Hi - Insurers are absolutely NOT ALLOWED to differentiate motor/home insurance prices by gender although you may find some still ask for gender and I'll come onto why that is. They are also not allowed to use pricing factors as a deliberate proxy for gender eg Mr = Male, Mrs = Female.

I believe one of the only industries that petitioned and received an exemption from the Gender Directive was hairdressers.

They may still ask for gender because what they can do is build models for internal analysis purposes that include gender (or a proxy such as Mr and Mrs). It would be illegal to use it to directly inform prices but it is important for the insurer to have these pricing models because having sold the policy they can then internally have a more accurate view of how much the policy will cost (statistically) and they can manage their reserving (how much money they keep available for claims) better.

What you're seeing is not unusual because there is data that is obtained behind the scenes, most notably credit score. So in your case you and your husband have different credit profiles (I'm not saying bad - just different). Most insurers use things like credit data or electoral roll data. It means if (say) your put all your details in as Mrs and then changed it to Mr it's possible the price would change not because of any attempt to proxy gender but because the quote with your correct gender found you credit data/electoral roll data but the quote with the incorrect gender didn't (ie they couldn't find a record because no such person exists).

The same is true for age, if you put a fake date of birth to see what difference age makes it probably won't match the credit database (and the like) so the price change you see if driven by age AND by the system using default values (normally higher) because it couldn't find a matching record.

As regards age discrimination insurers are 100% allowed to vary prices by age provided that it is done to reflect the risk eg younger drivers tend to have more bumps and so too do older drivers.

Despite the general view that insurers are rotten eggs, I have worked in the industry for many years for a few of the biggest names and I have never been asked nor seen any attempt to break the law or do anything underhand and I and everyone I have worked with would have called it out if this ever happened.

MyRealNameToo

https://forums.moneysavingexpert.com/discussion/6675299/house-contents-insurance-quote-gender-discrimination

Discrimination by its very definition means it's unfair/baseless/prejudicial. If you can statistically show there is a statistically relevant connection between an attribute and the claims experience that is not discrimination but differentiation. That aside, the EU banned pricing based on gender in 2011 for insurance. Whilst we are no longer in the EU Brexit converted all EU legislation to UK legislation and it's not been repealed since.

Therefore the differential in price you are seeing is being caused by something other than gender. Most insurers use dynamic pricing these days, particularly on aggregators like moneysupermarket. The pricing automatically changes based on where they are ranking, what their conversion rate is etc

Secondly most insurers do price testing, intentionally "randomly" lowering or raising a certain percentage of quotes to test what it does to conversion rates therefore enabling them to measure pricing sensitivity and predict the impact of future pricing changes. I say "randomly" because it has to be repeatable so that they can guarantee the same risk will always have the same outcome to comply with pricing rules. It therefore needs a seed but they need to be careful that the chosen seed doesnt have unintended impacts… if you did it on first letter of surname for example and decided that X surnames will get a 15% loading then that would be massively biased towards Chinese people and risk claims of racism

sheenas

We could all try and second guess the underwriting policy. I am happy the as a biological male I get charged more. I suspect that is realistic based on the likely hood of claiming.

flaneurs_lobster

I think @j2009 has probably found the answer - credit/ID checks, which I've just remembered are often seen on credit reports around insurance renewal times.

It would certainly be true that these would return significantly different results for my partner and I, but does still leave the question - is more weighting given to the 'lead' applicant on a quotation for a joint policy?

I too worked in the insurance industry for some years and would echo your remarks about probity.

@MyRealNameToo says

Discrimination by its very definition means it's unfair/baseless/prejudicial. If you can statistically show there is a statistically relevant connection between an attribute and the claims experience that is not discrimination but differentiation. 

Assume in this contest they mean "quote experience".

Agree entirely, my use of "discrimination" in the thread title was bad judgement since I didn't mean to suggest unfairness - differentiation is the correct term and I've amended the title.

My takeaway from this is that at next renewal I will make sure that I try both parties to the policy as the lead on the quotation request - and take the lesser quote.

flaneurs_lobster

https://forums.moneysavingexpert.com/discussion/comment/82061033#Comment_82061033

The consensus above is that such discrimination based on gender would be illegal (for general insurance).

The question seems to be "when making a joint policy application, does choice of lead applicant make any difference to pricing"?

j2009

Yes - the main policyholder will usually dictate what pricing data is used when it comes to things like obtaining credit data - I've never heard of an insurer looking up the credit data for all people on the policy and it's very unlikely they would because they would need consent from all those people.

Of course it's not always clear cut in particular when it comes you young drivers where it's not unusual for quote to be based on the highest rated driver (ie the most expensive). This came about as a way of reducing fron ting. However, I wouldn't expect this to include credit score for the reason given above about consent butI would expect it to be big ticket obvious items like age, claims and convictions.

sheenas

https://forums.moneysavingexpert.com/discussion/comment/82061052#Comment_82061052

Discrimination is the unfair or prejudicial treatment of an individual or group based on characteristics such as race, gender, age, religion, or sexual orientation.

I am saying that I would be happy to pay based on statistics data. The current law decimates by preventing price based on statistics. So more careful genders don't get risk based pricing.

So for example recognising that a male lead on a application is more likely to result in a claim is fair, in my view.

flaneurs_lobster

So for example recognising that a male lead on a application is more likely to result in a claim is fair, in my view.

Recognising that a male lead may give rise to more (numerical or greater value?) claims is interesting (and fair).

Using this information to price a policy is illegal (and illogical) when considering households containing a joint policyholder of a different gender and maybe kids and a smoking lodger.

sheenas

https://forums.moneysavingexpert.com/discussion/comment/82061105#Comment_82061105

An insurance actuary uses mathematics, statistics, and financial theory to measure and manage risk. They analyse past data to predict the likelihood of future events—such as accidents, natural disasters, or illnesses—and determine how much money an insurance company must charge in premiums and hold in reserves to remain financially stable

The law as it stands means some people have to unfairly pay more for others because an actuary is constrained.