Insurance Wars - Women v Men

[Rob McCow]

The UK Government is to abide by a European ruling on the use of gender in insurance, although it says the judgment goes against common sense.

In March 2011, the European Court of Justice ruled in a test case known as the Test-Achats case that from 21 December 2012 insurers will no longer be able to use gender as a factor in the calculation of premiums and benefits.

The decision will affect the way insurers price life and critical illness policies, annuities, private medical insurance, travel insurance, motor insurance and other types of cover where data shows that the sex of the insured can have an effect on the risk.

There was, however, some uncertainty about how the judgment would apply to premiums and benefits for policies written before the 21 December deadline. In a statement to the House of Commons on 30 June, Mark Hoban, the Financial Secretary to the Treasury, outlined the UK government's interpretation of the ruling and its intention to amend the Equality Act 2010.

"The government were very disappointed with this result, which it expects to have a negative impact on consumers," Hoban said. "The judgment goes against the grain of the common sense approach to equality which the UK government wants to see."

"The government believes that nobody should be treated unfairly because of their gender, but that financial services providers should be allowed to make sensible decisions based on sound analysis of relevant risk factors."

The full article is at: The Register.

Now, there is statistical evidence that women are slightly less likely to be involved in car accidents than men. (2009 data from DfT says 128,711 men were injured and 93,390 women). But should this translate to cheaper insurance premiums?

Everybody wants a bargain, certainly and if you have cheaper car insurance then it can save you a packet each year. There's an argument that you're subsidising all those other dangerous drivers, but I don't think that's entirely valid. It's always a gamble and you never know if you'll be the one injured in the accident. And somebody who's lucky enough to never have a road accident could spend their entire lives subsidising those who have crashed their car eleven plus times (I know a guy in his early 20's who's done this).

So who do you side with on this? Europe or UK.gov?

[WhiteCrowNZ]

Hmmm - it is applying a prejudice though isn't it? What about agism in insurance as well?

[Jason Thompson]

The point, surely, is that insurance is playing the probabilities. If you can have a home insurance company refuse to insure you against flood damage because you live on a flood plain, a life insurance company base their premium on your age and medical history, or a car insurance company alter your premium based on where you keep and use your car, why not have them able to adjust your premium based on if you belong to a group of people statistically less likely to have an accident?

This anti-discrimination business sounds good in theory, but it does overlook one glaringly obvious fact: men and women are different. This is not a difference based on skin colour or nationality or any other thing that make no difference, but is a genetic, physical, blindingly obvious difference. There's bucketloads of research on the differences in things like spatial awareness and modes of thought and other factors that would naturally affect the way someone drives. Now there are things this difference does not and should not affect, but there are others that are there and should be accepted and worked with, not swept under the carpet under some cobblers about discrimination.

[Zbigniev Hamson]

One thing's for sure. The way insurers will comply with these regulations will obviously be to simply put women's premiums up, whilst keeping men's more or less the same. I'm sure they'll be all for "equality" if it means they can rake in more money.

[Ralph]

So who do you side with on this? Europe or UK.gov?

I'm on the side of common sense - but when did that ever come into the European equation? For a start why was Greece allowed to be a member - but thats another debate.

Anyway the whole thing is in my view completely insane.

The directives from Europe are going too far - soon the UK government will probably be asked to give a public apology to prisoners because they've been denied the vote over the years - the tax payer will be asked to pay the compensation - it might not be as crazy a notion as you may think!