Time to force a change?
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Surely then premiums should be around 8% higher for males than females of the same status, and not up 100% difference as I have seen?
Also people getting the 'mate rate' really pisses me off, how can we catch a break? Would asking the insurance company to produce the actuarial evidence, like the article suggests, have any effect at all?
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If you are a young man about to take out motor insurance this year, you may wish to consider the reason your motor insurance premium is so large in spite of your best efforts at shopping around.
A report published by the Financial Regulator just before Christmas contains statistics that raise the intriguing possibility that motor insurance companies may be discriminating against young male motorists when it comes to the pricing of motor insurance. Such discrimination could be in breach of the Equal Status Act.
Years of propaganda from the insurance lobby have left the strong impression that young male drivers are responsible for burning a large hole in the insurance industry's pocket each year.
But the private motor insurance statistics published by the Financial Regulator suggest the opposite - at least in 2002.
The figures showed that the highest surplus per motor policy that year was reported for young male provisional licence holders aged between 17 and 20 years.
According to the report, this segment of the market recorded an average surplus of €3,035 and €2,194 for comprehensive and third party fire and theft cover, respectively.
The report also disclosed that the average surplus for all policies in 2002 worked out at €560 per policy for comprehensive cover and €757 per policy for third party fire and theft.
This suggested that young male drivers generated surpluses for the insurance companies that were more than five times the average for comprehensive cover.
The insurance industry says a surplus doesn't necessarily translate into a profit because of additional claims costs that may only become apparent in future years.
The report does support the insurance industry's claims that young male drivers cost them more in the longer term.
For example, it found that, by 2002, the industry had reported a deficit of €14 million for third party fire and theft cover in relation to accidents that occurred in 1998.This deficit was attributable to a number of poorly performing market segments: men under 20, men with provisional licences between 21 and 24 years; provisional licence holders between 25 and 30 years; and male provisional licence holders between 31 and 50 years.
However, it is also important to note that the data published by the Financial Regulator does not include additional income sources for the insurance companies, in particular, data on income sources from the insurance companies' portfolio of assets.
It is likely, for instance, that the high premiums being paid by young male motorists generate strong returns for insurance companies when they are invested in the stock market, but the data does not reflect this.
Even so, the Financial Regulator points out that the annual surplus can reasonably be used as an indicator of yearly market performance. And, on that basis, men appear to have contributed handsomely to the insurance companies' bottom lines in 2002.
In a new development, the Financial Regulator is now required to supply these statistics to the Equality Authority to assist the authority in assessing insurers' compliance with the Equal Status Act 2000.
It will be interesting to see what action the Equality Authority takes when it has digested the report, given that it has already taken some landmark cases against insurance companies accusing them of age discrimination in the provision of insurance services.
Indeed, the authority noted in one of its recent annual reports that the largest category of cases on access to insurance relate to discrimination on age grounds.
In one case, the claimant contacted the call centre at First Call Direct for a motor insurance quote in November 2001 when he was 23 years old. The insurer refused to quote the claimant because he was under 25. The Equality Authority pursued the matter on behalf of the claimant, and the case was listed for hearing in the Equality Tribunal.
On the day of the hearing, the insurance company announced that it had now changed its policy and removed the lower age limit for quotations. Because of this and other factors relating to the case, a financial settlement was agreed.
In another case - Ross v Royal & Sun Alliance - the claimant was refused a quotation because he was 77 years old. The Equality Officer said that, while there was a case to be made for a company quoting proportionately higher premiums to older drivers based on the results of their actuarial reviews, the complete refusal of a quotation based solely on a person's age was not acceptable.
In a similar case, this time in the health insurance area, the Equality Authority was contacted by a woman aged 90, who had been a member of the VHI for over 40 years. She was still in full-time employment and drove to work each day. As she liked to travel abroad twice a year, she applied to the VHI for annual travel insurance, but the VHI refused to quote her, as its policy was not to offer such insurance to members aged over 79.
The Authority wrote to the VHI to explain that such a blanket ban on providing insurance to a person because of her age might be in breach of the Equal Status Act 2000, as had been found in the Ross v Royal Sun Alliance case.
The VHI initially disagreed but, following further correspondence with the Authority, negotiated with its underwriters to provide cover for members over 80 years.
It is a trait of all insurance companies that they try to maximise their profits by minimising their risks and reducing their costs. Irish insurance companies are no exception. Indeed, Irish insurers are particularly savvy on the public relations front, and have largely succeeded in persuading the public and the government that if motor insurance premiums here are high, it is the fault of everybody except the insurance companies.
The insurance firms blame their customers, particularly young male drivers; they blame their customers' legal representatives, saying their costs are too high; and they blame the government for poor roads and low driving standards. And while these claims are true, they are not the only reason why motor insurance here is so expensive.
The fact of the matter is that motor insurance companies are making very large profits from Irish motorists, despite their protests to the contrary.
Those with long memories will recall that the Motor Insurance Advisory Board (MIAB) reported that the profits of Irish insurance companies were ten times greater than for British motor insurance companies in the 17 years from 1983 to 1999.
The industry has made great play of the fact that motor insurance premiums fell last year to 2000 levels in the wake of certain reforms of the insurance market.
But that did not stop Irish insurance companies reporting fantastic profits.
According to figures published by Davy Stockbrokers last year, the Irish general insurance market, including motor and home insurance, was one of the most profitable insurance markets in the world.
The legal department of the Equality Authority is currently studying the Financial Regulator's report on the motor insurance market. It remains to be seen if it concludes that some of the insurance industry's bumper profits are being made by unfairly discriminating against Ireland's young men.
It is not so much a question of testing whether young men are responsible for more accidents - the MIAB report found that young, male drivers had an eight percentage points higher rate of responsibility for accidents compared with female drivers of the same age and licence status.
Rather, the question is whether the higher prices charged to young male drivers are proportionate to the risks involved. If I were one of those young men, the very least I would be asking my insurance company would be to produce the actuarial evidence to justify charging me five times more than the average customer.
Depending on the answer, I might then talk to the Equality Authority.
the MIAB report found that young, male drivers had an eight percentage points higher rate of responsibility for accidents compared with female drivers of the same age and licence status.
Surely then premiums should be around 8% higher for males than females of the same status, and not up 100% difference as I have seen?
Also people getting the 'mate rate' really pisses me off, how can we catch a break? Would asking the insurance company to produce the actuarial evidence, like the article suggests, have any effect at all?