Motor Unisex Insurance Rates Approved

NorfBank

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The EU has [broken link removed] insurance companies from assessing premia according to gender.

This has far reaching consequences to life and car insurance products.

Life insurance companies will have to reprice their life insurance, income protection, car insurance and annuity rates and charge men and women of the same age the same rates so:

Male pension annuity rates will fall.
Female car insurance will rise.
Female life insurance rates will rise.
Male income protection premia will rise.

It seems a crazy verdict as it has been proven that women are safer drivers than men, women live longer than men and women also claim more on income protection products. It's not like the insurance companies were discriminating on an arbitrary basis.

This will apply from Dec 2012.
 
I heard Connor Faughnan describe it well this morning; a triumph of equality over fairness. Pure daft.
 
Could have implications for pensions. Women statistically live longer than men so may have to pay more to fund their retirement.
 
This will make no difference to male car insurance rates. Female rates will rise.
 
I know those in the insurance industry think this is crazy EU "right shape of banana" stuff. But I don't agree. Take maternity benefits, still perfectly legitimate to charge women more for that, because there is a clear biological link.

But don't tell me young females are better drivers than their male counterparts because of their gender. Gender is a nice lazy proxy for the real reasons. Insurance companies will just need to get more precise in their assessing of risks. I suggest a few questions which would help:

1) How many pints of beer to you drink a week? (women don't drink pints)

2) Do you bet on horses?

3) Do you attend football matches?

etc.

I am sure that it can be shown that there is a correlation between these activities and the lifestyle which goes with boy racers.

If the industry can pinpoint what is really driving boy (or girl) racers then it will be fairer all round especially for the majority of young males who are not boy racers.

At the other end of the spectrum, women live longer, that is statistically proven. But is that because they are women or because of lifestyle/attitudes?
 
I suggest a few questions which would help:

1) How many pints of beer to you drink a week? (women don't drink pints)

2) Do you bet on horses?

3) Do you attend football matches?

etc.

I am sure that it can be shown that there is a correlation between these activities and the lifestyle which goes with boy racers.

Agreed...just to make sure these cunning boy racers cannot trick you, you could add

4) Do you own hair straighteners?

5) Do you read celebrity magazines?

6) How many glasses of wine do you drink? (men don't drink wine)

:rolleyes:
 
At long last women's superior longevity and men's shorter life span have been equalised at the stroke of a pen and someone has made a name for themselves in Belgium today.

How do we avoid discrimination based on whether you are a male or a female in a Europe where in Lithuania the average man 's life expectancy is 64.9 years up to Sweden where it is 79 years. Women fair better at 76.5 years in Lithuania up to 84.8 years in France. Ignoring the important fact that class and living standards affect mortality we cannot change the fact that there is a differential in the mortality rates based on whether you are born male or female. It is not inequality it is a fact of life.

Perhaps one day we could narrow the gap and have both sexes live equally long lives? Taking it a step further then the population census will be next for the chop.
 
Gender is a nice lazy proxy for the real reasons. Insurance companies will just need to get more precise in their assessing of risks.

Proxy is the word. There is nothing wrong with using proxies where the alternative is an administratively costly mess of form filling and red tape.

Besides, all of the factors you list above are probably linked to testoserone. So maybe do a medical to assess testoserone levels if you want to start getting more accurate!

By the way, how can you be in favour of fully detailed rating but believe no rating is superior to partial rating based on proxies?

Also, should we stop discriminating on the basis of age also?
 
Also, should we stop discriminating on the basis of age also?

Of course.

It should be on driving experience only.

A 40 year old who started driving last week should pay more than 30 year old who has been driving 12 years without incident.
 
This list shows that there are at least five countries where men live longer than women, so the biological case is not proven and I have never heard any attempt to prove a causal biological link between gender and life expectancy.

Who goes to war? Who works the mines? Who digs the roads? Who has the stress of providing for the family?

Underwriting will just have to identify the real causes of risk rather than the proxies.

Whatever about life assurance/annuities, where there may be a biological link (as yet unproven) to the risk factors, I can't see how anybody thinks it fair that a well adjusted young male should have to pay exhorbitant rates just because a minority of his age and gender are ASBO material.
 
The Society of Actuaries in Ireland has issued a press release which differs quite markedly from that of the UK profession. You will note that the Irish profession is unremittingly negative whilst the UK approach shows quite a balanced perspective. I particularly find it difficult to understand why the Society makes the following point:
SoAI press release said:

The ruling may have other social implications too. For example, unisex rates for motor
insurance could lead to an increased number of road traffic accidents, since insurance may
become more affordable for young male drivers and insuring more powerful cars may come
within their reach.
 
I agree with you on that part Duke. I read the same release and cringed at that section, it's like something you'd write in a secondary school debate.

I do, however, believe that you need a trade off between getting too specific on risk factors (e.g. we can't get into the situation where we do genetic tests for predispositions to certain illnesses) and not distinguishing between anyone on any basis. I don't think you can avoid generalisations in setting rating factors to try assess the underlying risk.

If the rules were always the same for everyone there would be no problem. Changing the rules at any given point will always lead to difficulties for a period
 
Of course.

It should be on driving experience only.

A 40 year old who started driving last week should pay more than 30 year old who has been driving 12 years without incident.

Think life insurance though. You'd be fairly screwed on mortgage protection as a 30 year old if the rates had to be set so that they were profitable for 80 year olds
 
.....we cannot change the fact that there is a differential in the mortality rates based on whether you are born male or female. It is not inequality it is a fact of life.

Really??

I have a feeling that if the mortality rates were reversed then it wouldn't be accepted as simply that's just how it is.
 
DerKaiser gender like race are things we cannot change. I think it is therefore important that any "discrimination" on these grounds is firmly based on proven facts. Possibly black people are more likely to get knocked down at night, in which case that is a risk which having been born black you just have to live with including its impact on insurance premiums. But being charged a massive premium because others who share the same crude statistic of being a young male are ASBOs just ain't fair.
 
But being charged a massive premium because others who share the same crude statistic of being a young male are ASBOs just ain't fair.

I'm coming from a Life Insurance perspective so I might see things in a different way. I'm vaguely aware that with motor claims you could nearly guess which cohorts are going to result in the highest claims.


With life insurance though, there are huge volumes of data on males suffering higher mortality but lower morbidity across practically the entire age range.

There are a variety of reasons for this, but beyond the age of 25 the so called "accident hump" disappears quickly and the male/female differences come down to a large variety of factors making it impossible to identify any set group of males that could be excluded leaving the remaining males with similar mortality levels to females.
 
Duke, the examples you give are in sub Saharan Africa where the unfortunate effects of poor health, bad nutrition, HIV, sanitary conditions etc have generated those statistics. If you wanted to offer life assurance cover in those countries you could using actuarial principles.

The actuarial principles whose two most important contributors Halley and Dodson are now challenged by a court ruling in Belgium, Eurpoe which aims to have equal treatment of men and women, but only in selected parts of the world. Let them look to the ex colonies of the Belgium Congo, Rwanda, Burundi.
 
Men and women are different. That's a fact. And young men are proven to be very dangerous as a statistic based on insurance companies records and acturial studies.

I can actually remember an incident with my siblings when we were learning to drive. When one of my brothers got in the car I got out. Sure enough he straight away had an accident. I didn't need insurance companies to tell me he was likely to do something crazy. There was no beer, no gambling nor football matches and still none but he is now a very safe driver and compared to a lot of other males I observed was one of the safest but still not as safe as any of his sisters. Men like speed and the excitement of the power of a car, particularly prior to being about 30/married/settled down. One of men's favourite topics is cars. Women never talk about cars.

Men are more confident in cars, women are more cautious, women tend to prefer their partner to drive, women have more minor accidents. In general. So car insurance prices reflect this.

Women live longer that's a fact, so their pensions cost more as they will live longer.

For the life of me I cannot see how this ruling, while logical, makes practical sense. The equality laws were brought out to end discrimination that was unfair. Insurance companies applying acturial rules is not unfair. If one keeps going with the logic, we will have boys with long hair, earrings and wearing skirts to school, the banning of separate toilets etc because that is the logical way to go.
 
I worked in the motor insurance field for years. There is a clear co-relation between gender and accident rates, as well as the seriousness of accidents. Research I had seen a few years back indicated that whilst men and women had roughly the same number of accidents, accidents involving men were more serious. More recent and detailed research indicates on average young male drivers are a considerable greater risk. It is both counter-intuitive (how many girl racers in souped up cars have you ever seen) and statistically wrong to claim otherwise. Insurance is inherently discriminatory, there will of course be exceptions to averages, but they are just this, exceptions. If there were easy ways to seperate responsible young male drivers from their boy racer counterparts ( or female equivalents) I would be all for it, but it is elusive.

Many moons ago there was a Dutch insurer who attempted to insure only non-drinkers, this company lasted a few yrs and folded. Gender on the other hand is a proven link, and I think it is maddness to exclude it as a basis for insurance.
 
Bronte you give a good pen picture of why young males are more risky drivers than young females and I agree with it. But what you describe are cultural influences. I see nothing to suggest that the risk arises from the biological difference between genders.

No-one is accusing insurance companies of being discriminatory per se and no one can blame them for going the easy route of using gender as a proxy for the true risk factors. But I for one believe that gender equality, if justified, is a higher aspiration than ease of insurance pricing.

The burden of proof is on those who wish to argue that there is a genuine gender inequality based on the biological difference. Surely no-one is arguing that reckless driving is a biological effect.

Longevity is altogether different. It is possible maybe even probable that gender is a factor or race for that matter; after all longevity is by and large a biological attribute. No-one denies that statistically women live longer than men in most societies. The fact that in some societies this is not the case suggests to me that the biological vs cultural case has not been proven.
 
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