New EU law prohibits use of gender in insurance and pensions

[hayesey]

Today a law was passed by the European Court of Justice which prohibits the use of gender in calculating premiums for car insurance, life insurance and pension annuities.

Obviously the most important issue for people on here is car insurance.  Now gone are the likes of Sheila's Wheel or Diamond offering special insurance for women only but also insurance companies in general cannot charge differently purely based on someone's sex.  

I do actually agree with the principle.  I appreciate that insurance is based on risk but I don't think someone's sex is a fair assessment of risk in just the same way  I also don't think it'd be right to base risk on someone's nationality, colour or sexuality.  You might be able to make some statistics which show one group of people to be more of a "risk" than another but it doesn't mean it's right to do so.

But sadly, the truth of the matter is that this will only lead to an increase of premiums for women, insurance companies will not reduce male premiums because they are not going to just give profit up.  They will use this as an excuse for increasing profits in general.  

You could say that it is correct to base insurance on someone's sex because statistics show male drivers are more likely to claim and the claims are higher when they do.  But in my eyes it's far too much of a generalisation.  I've been driving for about 10 years and have never made a claim or even been in an accident at all (except as a passenger in someone else's car).  So how is it right that a woman of my age from the same area with the same circumstances STILL pays less than me?  The statistics clearly aren't an accurate enough reflection of the truth.  

The last thing I'd say is that I don't see this as being the same as "discriminating" against people in high risk postcodes, people with fast cars etc... as neither of these are discriminations at all.  It is your option to live in such an area or buy such a car.  But I don't remember being asked if I wanted to be a man or a woman before being born, just as I was never asked what colour skin I'd like etc...etc...

Those are my thoughts anyway, interested to see what other people think.

There's a full story here:

http://www.guardian.co.uk/money/2011/mar/01/ecj-gender-ruling-insurance-costs

[PeteG40]

can see both sides of the fence tbh,  next argument is ageism.  Who says that a 25 yr old with 7 yrs no claims is a worse driver than an 80 yr old with 7 yrs no claims?  you can't choose to be your age.

[hayesey]

yes I was waiting for someone to suggest that.  I don't really have an answer.  You are right you can't choose your age but at the same time it's only a temporary situation.  And I do think that insurance companies take advantage of the situation in an unfair way.  I don't really know what the answer is there.

[SamG40]

Yeah I too can see both sides of the fence. All I do know however is that I cant see it saving me a penny come renewal time but I bet the wife's goes up next year (again). It just means the insurance companies will bring girls inline with the boys and they will make more money.

[hayesey]

yep, sadly that is true.  And they'll probably also say that the amount of admin and work implementing new pricing means they'll have to also increase bloke's fees too (and then increase womens even more to make sure they are equal).  The only winners will be the insurance companies, except for the likes of Sheila's Wheels etc... as I can't see too many blokes getting insured by them and now there's not going to be much or any of an incentive for women to do either.

[Andy]

I think either you should have a fully discriminatory system (i.e. colour, gender, sexual orientation, hair colour etc. etc.) or not at all. Maybe it's making it a bit black and white, but if gay black Polish immigrants with 12 toes and red eyes have a lot of accidents shouldn't they all pay more for insurance?

The risk profiling is also what helps insurance specialists give us competitive prices on what are in reality very high risk vehicles. E.g. I pay half as much to insure my Polo as I do my Saab - yet the Polo's insured value is higher, its power to weight ratio is comical, and I did all the work myself. I could've built an utter deathtrap, but because of risk profiling they're able to summise that because I've put all that effort in to building it, and am in a few VW geek clubs, that I'm likely to love the car and me pretty averse to crashing.

A fair bet is to do what Hayesey suggested on CP, and do it based on risk statistics for the first couple of years of driving - and then base it on individual customer profile after that. But it's difficult to build up an accurate enough profile of an individual for it to properly work.

E.g. I've had one accident in 11 years of driving, and it was my fault. I was working long hours and doing a lot of miles which increases the risk, but ironically was probably driving as slowly and carefully as I've ever done and had various driver assessments at work along with driver training. At the time I was even doing about 10mph under the speed limit. Compare that to the times when I was 17 years old and thought I was invincible (and drove accordingly), but didn't have a single accident.

It's the exceptions that prove the rule, and I think insurance companies had done a decentish job of calculating risks and charging accordingly - even though it's not a fool-proof strategy. Only other way I can see them doing it is purely to base it on the car, and useage/mileage and location. But that'd mean we'd all pay shitloads more to offset the risks of 19 year old drug dealers driving around in M3s and suicidal 17 year olds in 1000cc Saxos (or Polo CLs...).

[scotsjohn]

That's exactly what we're doing now; we're paying through the nose so the fuckwits can still drive. It's not just bent metal, it's the megabucks payments for crippling injuries and  loss of life that really put the prices up. I've been driving for forty-seven years now and I can't complain too much about premiums, but why should a new driver have to pay a couple of grand without having an accident; he or she might well never make a claim. It would make more sense for anyone who has a series of claims early on in their driving history to have their licence pulled. Time to think what it's about. I know of one guy who wrote off NINE cars before he was refused insurance.

[Varley]

Hands up, I work in car insurance pricing.

I feel there whilst there is a strong case that insurers should be able to use any legitimate rating factor available to arrive at the most appropriate price for any particular risk (including gender) it is fair to say that most people would find the idea of rating on skin colour abhorrant regardless of how robust a statistical case could be made, proving that issues like this cannot be separated from politics.

For me, rating on skin colour, sexual orientation or nationality goes too far because the underlying causes used to explain the discrepancy would be spurious in the extreme and rightly wide open to accusations of racism etc. However for me rating on age, experience and gender should be allowed as the rationale is easy to articulate – just watch the discovery channel or reference your own experience.

Incidentally, one thing that is missing from the press coverage is that in general terms men might actually cheaper than females in the middle ages, so whilst the increases for young women make the headlines it may not be quite the full story, although clearly this would vary.

I do feel I should make the point that whilst it’s easy to demonise the industry as taking any excuse to 'screw' more money out of the helpless consumer, the insurance industry have lost money on private motor insurance for a number of years now, in some cases to an eyewatering extent, this is easy to see from any of the publically available industry analyses and/or company results.

The truth is the increases seen by most motorists in recent years has nothing whatsoever to do with corporate greed, we do after all operate in one of the most perfectly competitive and transparent markets for any good or service available thanks to the advent of price comparison websites.

If you're looking for someone to blame try personal injury lawyers, loosely regulated claims management firms, price comparison sites, cash for crash scams and good old fashioned fraudulent claimants, especially exaggeration fraud. I mean, how many of us know someone who got more than they deep down thought they deserved for "whiplash" or "soft tissue injury to lower back"?