Is it sexist for the insurance industry to take gender into account when setting its premiums?

[Lio]

You've probably seen article like this one in the last few days, talking about how women could find insurance premiums (particularly car insurance) going up if the EU rules it discriminatory to take gender into account when setting its premiums.

A friend has asked whether this is discrimination against men, or just sound business sense? I've always thought the latter, given that the stastistics show that women have fewer car accidents and less spectacular ones than men. But if someone is told that the reason their premium is higher because they're a man, isn't that sexist?

I know there are other issues involved, such as age, but what do you think about the gender one?

[trixymalixy]

Yikes!! Thank god I got my car insurance sorted yesterday!!!

[GrimmaTheNome]

You say women will gain
no, I said I probably would benefit and asked what effect others thought it would have for them.

[TheCrackFox]

I can't drive but do have a pension so it is a win/win situation for me.

[BigGitDad]

You say women will gain from the increased annuity rates but how many women have pensions as opposed to how many have car insurance? I think you will find it will be a net loss.

[SardineQueen]

What will be the cry when all of the blokes realise they have knackered their pensions?

Snoffair! (A la my 3 yo) - Bet you

[SardineQueen]

Just came to post this!

Says in the article that annuities will be affected. Nose/face. What pillocks.

Will age be on the table next, and disability? I don't see how they can fail to be TBH.

Personally will gain more from the annuity thing than will lose from car premiums I'm sure. Yippee!!!

[GrimmaTheNome]

I suspect I'll gain more from the annuity equalisation than I lose by the insurance issue - how do you think it will affect you?(I'm 50 so probably gender not such a factor in the car insurance).

[JeaninePattibone]

The cout has ruled:
www.bbc.co.uk/news/business-12606610

The industry has until December 2012 to change their pricing models.

[HerBeX]

[trixymalixy]

Excuse me,I am NOT an accountant!!!! I am far more boring than that!!!

[HerBeX]

But they only want equality when it benefits them...

Imagine my surprise

May I add that I am so glad I wasn't here last night for this discussion - it was like Accountants Anonymous round here

[trixymalixy]

That's brilliant Sardine. That's why I haven't managed to find anything on their reasons for bringing the case, cause they don't bloody well know themselves!!!

Equality gorn mad at any cost.

[strawberrycake]

It's hard not to let the fact that it's only £39.50 extra to add me to my husband's insurance colour my view tbh.

I do though believe it's the same as judging by age, job etc. You're lumped in with others of the same category without any personalisation.

[SardineQueen]

Or have I misread it and it's the Court who don't seem to understand how insurance works?

In that case Houston we may have a problem .

[SardineQueen]

try here something from the ABI about it

I liked these bits:

"The Judges did not make a summary of their opinions, but rather addressed the following the questions to the submitters:
? Test-Achats were asked what their views were on the use of age in insurance. Taken aback with this question, they responded that the case at hand was about the use of gender and they were not in a position to respond to this question."

and

"The Court did not ask any more questions of the submitters, although the questions that were asked did display a certain lack of understanding about how insurance works."

Oho.

A few blokes who are pissed off that insurers think they are worse drivers than women, then, when everyone knows women can't drive for toffee

[trixymalixy]

I believe the advocate general threw out the bit about retrospective application due to the effect it would have on future premiums. At least she had one sensible decision!!!

[Lio]

OP here just to say thanks for all your interesting thoughts. I had also been thinking about what might happen if one's sex were ignored in every type of insurance (which is a point that has been made more elegantly by others). There are some illnesses that are exclusive, or near exclusive, to one sex, so it would seem nuts to disregard that information. It's all a bit of a head twist.

[trixymalixy]

It's a Belgian consumer group Test-achat bringing the case to court. I'm afraid I don't know more about the background.

[karmakameleon]

Retrospectively??!

[karmakameleon]

My perfect Friday night in!

The calc you do when you take out insurance is

[Size of potential payout] x [perceived risk] = [price you will pay]

The insurance company is doing the same calc to work out the price to charge. They are also trying to get a more accurate assessment of perceived risk than the one you have. That's difficult because you know more about your health, lifestyle etc than they do.

For your life insurance, potential payout is huge so that makes it worthwhile even if they think risk is higher than you do, so low risk people are unlikely to withdraw from the market.

[SardineQueen]

Christ almighty

So the people bringing this legal challenge - are they some men who are upset at being seen as bad drivers? Or are they keen for sex to be removed from consideration when buying other things like annuities as well? Or are they aiming for removal of all consideration of "discriminatory" factors in pricing - sex, age, medical? Do you know the background?

[trixymalixy]

I went to a presentation at a conference about the legal challenge and apparently retrospective application is part of it. talk about cutting their nose off to spite their face!!!

[SardineQueen]

They couldn't do it retrospectively? Surely?

[trixymalixy]

The interesting thing will be if they do decide to apply it retrospectively. Can you imagine the cost of recalculating every insurance premium on unisex rates!!!!

The whole thing would be utter madness and lose lose for everybody. Apart from the actuaries as demand for their services and therefore probably their salaries rise >The cost of insurance would rise across the board.

[SardineQueen]

Oh no DH is talking about it now as well

He thinks that compulsory insurances should be not for profit and run by the government...