Court rules that gender cannot be taken account wrt car insurance

[JessinAvalon]

Breaking news on the BBC.

It will affect car insurance costs, life insurance and annuities.

[mpsw]

I saw an article in The Telegraph about this. the 2004 directive on which the case was based did allow for differential rates for the sexes providing this was backed by robust actuarial information. More worrying than car insurance, a sex-blind mandatory ruling would also hit annuity rates for pensioners.

[InmaculadaConcepcion]

So, we can expect all insurance premiums to be lowered to the women's rate, huh?

As if!

[David51]

This is mad isn't it?

There's nothing wrong with discrimination if its based on actual differences, as it is in this case. That's why older people pay more for health insurance (or will that also be illegal?).

[Bluegrass]

David, would you say the same thing if statistics showed that black people were more likely to default on loans? Would you feel comfortable with a company called "whitey's loans", which had a chirpy jingle explaining that they would only lend to white people and so could lend at preferential rates?

Sometimes good principles just have unexpected outcomes, which I think is the case here.

[meditrina]

People are charged different rates for financial products, though - poor credit rating, higher interest rate. It's not related to ethnicity because there is no data whatsoever to show that this is relevant. Relevant actuarial information has been the basis of a risk-based insurance/assurance industry.

The is an abundance of data on sex differences though - and this is a major factor in things like pensions.

[Niecie]

I agree with David. That statistics bear out the fact that women are less likely to have costly accidents - they don't make a value judgement on women and their ability to drive relative to men. They are about what it costs the insurance companies to insure women as opposed to men.

Why should women be forced to pay for men's inadequacies behind the wheels because that is what is going to happen. The rates won't go down to give men equal insurance premiums they will go up so women have to pay more. How is that fair?

Comparing this to giving loans to black people won't wash. Loans are given on your ability to pay them back and your personal credit rating, not on actuarial statistics like insurance. The basis is not the same.

[Lio]

Thread discussing it here.

[Bluegrass]

I think the principle is the same though, an assessment of risk with a view to making a profit. Data based purely on ethnicity isn't out there as it would be far too politically sensitive to consider doing the research, let alone publish it. No such squeamishness exits over researching differences between the sexes, and insurance has been given special status. Interesting issue, I think we will see more of this.

[David51]

Data based purely on ethnicity isn't out there as it would be far too politically sensitive to consider doing the research, let alone publish it

Or maybe the data based on ethnicity isn't out there because it doesn't actually exist?

[Bluegrass]

It's existence ( or non -existence) isn't necessary to debate a principle. The law must be applicable across the board or it leaves itself open to accusations of discrimination (as has happened here). This is why it is so fascinating.

[David51]

I would say that the principle is not to discriminate unless there is evidence of actual difference. So before you get to the point of making laws you would need to research what differences exist, if any.

I grew up at a time when it was taken for granted that women were worse drivers than men. There would never have been preferential rates for women unless statistical evidence had persuaded insurance companies to provide them.

[DaffadownDilly]

Hi, I don't usually post here, but have lurked.

I personally feel that this move is another way in which to penalise women and free men from the responsibility of their actions (driving safely). I think that when there are firm statistics to prove that women are safer drivers, then the variations in insurance prices should be allowed.

You can guarantee that if the tables were turned, insurances would not be indiscriminate of sex.

[DaffadownDilly]

Will insurance prices for men lower as a consequence?

[JeaninePattibone]

Don't recall seeing ethnic origin being asked on car insuance applications.

however there has previously been controversy over the use of ethnic profiling by the police. The issue is that, although the statistics might show ethnicity as a "risk factor", there is no evidence that it is causal.

For example, young black men may be over-represented in crime statistics, but that doesn't mean that there being black causes them to be violent.

The main principle here is that you should not use a protected characteristic as a proxy for other, perhaps even unknown, characteristics that actually case the outcome that you wish to prevent or insure against.

This doesn to mean that you can't use non-protected characteristics. This case was also specifically about sex, but I suspect it may cause further debate about other protected characteristics in relation to insurance.

Interestingly age was considered here, but the opinion put before the court differentiated this issue on the basis that age is a characteristic that changes. People are likely to need insurance products at different times during their lives and therefore the effect on insurance pricing will be both positive and negative. As such there is no inherent detriment to any individual.

It really dissapoints me to see so many people on this board trot out the usual reactionary arguments against equality legislation.

[JeaninePattibone]

@DaffadiwnWilly
"You can guarantee that if the tables were turned, insurances would not be indiscriminate of sex."

The tables are turned when it comes to Anuities - men will now get lower rates.

This will probably cost men far more than anything they gain fom cheaper car insurance.

[meditrina]

DaffadownDilly: news reports are suggesting that prices for male drivers under 26 will fall by about 10%, but that for females they will rise by about 25% (presumably these are early illustrative figures, and may change).

The potential hit on pensions annuities is more serious. One pundit was suggesting men within a couple of years of retirement should consider bringing it forward to secure the annuity before the changes take effect because of the potential reductions. Everyone who is expecting an annuity-based pension will need to review their provision.

[David51]

Yes its funny how car insurance is getting more publicity than people's pensions

[Mamaz0n]

if they can't judge you a higher risk due to gender why can they use age as an indication of risk?

[StealthPolarBear]

Good point - will age come into this?

As far as this goes, more than half of people will lose out financially. Women, obviously, but also families, so including men. So surely most people must oppose this?

[meditrina]

Perhaps that'll be the next to go. Are there any EU rulings on age discrimination?

It would affect car insurance (again), as well as annuity purchase, and probably a huge increase in health insurance (if the elderly cannot be excluded and must be charged the same premium then the costs for everyone will increase enormously).

[GrimmaTheNome]

Surely with car insurance a large factor - after the first few years - is an individual's track record? If you've had no accidents your premium goes down. It really should be akin to the loans/credit rating scenario.

[SardineQueen]

Re ethnicity can I quickly point out that factors such as where people live impact on different types of insurance. Which could be seen in a similar light.

This ruling opens up a huge can of worms, it will be interesting to see where it leads.

I imagine that age and disability discrimination will up soon - the argument against using sex applies to age and health questions as well I think.

Is going to be very interesting to see what happens with all of this.

I know when the industry were lobbying about age discrimination legislation their argument was that if they can't take age into account then many products become untenable...

[Mamaz0n]

but where you live is used in relation to the possibility of the car being damaged as part of a criminal act.

BUt if you cannot discriminate over sex i cannot see how you can over age either.

also your premium will alter depending on the type of work you do as well. unemployed usually means higher premiums.

I always wondered why no one had taken the insurance industry to court before actually, they are judging your risk based on what other people do. surely in our society we are innocent until proven guilty...except with insurance.

[JeaninePattibone]

I've tried numerous times to explain why age is different to sex in this context. Here is what the Advocate General had to say about age:

"It is true that age is a characteristic which is also inseparably linked to an individual but every human being passes through different categories of age in his life. If insurance premiums and benefits are therefore calculated differently according to age, that does not yet as such give rise to any fear that the insured person will be disadvantaged as an individual. Everyone may, on the basis of age, in the course of his life be in receipt of insurance products which are more or less favourable to him."

[sakura]

What a surprise. Men use "equality" to get what they want.

Again.

I repeat: more men complain to the Equal Rights Comission than women. Despite the gender pay gap and the glass ceiling and the fact that women are concentrated in the shit jobs that men won't do.