Women's Car Insurance Premiums Set to Increase due to EU Equal Rights Ruling....

[mrscumberbatch]

We've been having a small but interesting conversation about this recent EU ruling that comes into play in December on this thread in Money Matters

here

The EU has ruled that women having discounted premiums, (based on statistical evidence which proves that women are safer drivers/claim less) should not continue in the name of Gender Equality.

There hasn't been a great deal about it in the press but it's a huge issue which is rocking the insurance world.

What are your views on women having to pay higher premiums because their gender is now deemed irrelevant?

[SingingSilver]

My brother was being smug and crowing about his girlfriends payments going up 'You wanted equality, etc, etc' then she pointed out that as she is at home with their baby and not working he will be the one paying the higher costs of her insurance - DOH!

[TheDoctrineOfSnatch]

Thank you Himalaya - actuarially sound but socially unacceptable - exactly!

[Himalaya]

But insurance is a game of averages - by it's nature premiums are priced by risk factors. Journalists pay higher premiums than accountants, because on average they have more prangs. It you are a super careful driving journalist you suffer from higher premiums than you should because of the averages,, just like if you are a super careful driving teen.

On the other hand I guess we wouldn't agree with applying this logic to race, sexual orientation or marital status if these were shown to be linked to different average risks. So I guess, on balance, it's a good thing that gender discrimination is ruled out here because although it's actuarially sound it is socially unacceptable.

I agree the black box is the way forward!

[senua]

I think its crazy to alter the facts that 'in the main' women cost less to the insurance industry

Do you REALLY not get it Shriek?

'In the main' - that's the key point. It's most women/ men but not all. You can't tar everyone with the same brush merely because of their gender. There are bad women drivers out there. There are good men drivers out there. Why should either one get given the wrong odds, based purely on gender?

If we follow your logic then we are back to 'in the main' women get pregnant and take maternity leave so it's best not to employ them, and if we are not going to employ them then what's the point in educating them ...

[Frans1980]

Some insurers have already started charging men and women the same premiums (because of course they will benefit).

www.gocompare.com/covered/2012/09/the-eu-gender-ruling-what-you-need-to-know/

"Young women?s policies are set to get quite a lot more expensive, while young men?s will get a bit cheaper.

The Association of British Insurers expects that young men could benefit from the largest average decrease in premiums of up to 10%, while young women could experience the largest average increase of up to 25%."

[PigletJohn]

Shriek
I did see Kritiq that women will be paying higher premiums as a result of longer life expectancy

I don't understand what you mean. Are you talking about Life Assurance premiums, motor insurance, pension contributions, or what?

[Shriek]

apparently, according to the article 9% ave reduction on mens premiums

[TheDoctrineOfSnatch]

Shriek, I don't think actuaries are being sexist. I don't doubt that there are statistical differences between the two sexes.
It's just that it is no longer acceptable to price the policies differently on that basis

just as it isn't acceptable to treat recruitment of male and female police officers differently if both pass the basic tests, even if statistically a male police officer is more likely to come out on top in a fist fight with a crook, or my previous example of recruiting 25-40 year olds.

I don't think we are going to agree though so I'm off to bed. I hope the professor of bio psych you mention would support the proposed Science Club Topic, do ask her/him if they happen to be an MNer.

[Himalaya]

I guess they ought to reduce male premiums at the same time, since they are in a bigger risk pool? Something tells me they won't though.

[Shriek]

I did see Kritiq that women will be paying higher premiums as a result of longer life expectancy... so why are they paying more for this (higher risk.. longer life, bigger payouts), but more ALSO for being a lower risk (less accidents, lower payouts)!!

this is women being penalised both ways...

[LRDtheFeministDragon]

'In relation to biological differences in brains, there are.... and there are also many cases, none of which I am prepared to detail here. Maybe those of you who doubt can speak to a prof of bio psych to discover the science for yourselves or research it too.'

[Shriek]

I have reviewed the arguments here, and still think its crazy to alter the facts that 'in the main' women cost less to the insurance industry and therefore benefit as a group from lower premiums (poor actuaries who do an exacting job, will simply be replaced by black boxes who it seems by doing the same thing would not be being sexist but the actuaries must be?!?! mmmm... ) Why must people be 'being sexist' just because in a circumstance one is proved different to the other? At one level yes, as a group women have proved to be a better risk (no one in business does it be sexist lets be honest!), but on another level the individual is also catered for in terms of NCB built or lost through individual performance.

In relation to biological differences in brains, there are.... and there are also many cases, none of which I am prepared to detail here. Maybe those of you who doubt can speak to a prof of bio psych to discover the science for yourselves or research it too.

Are the actuaries actually being sexist, really? in favour of women?.. what is their motivation for this... Why? I have absolutely no problem with high risk 'people' paying higher premiums.. but the highest risk are young males.

Tonight as if to prove a point a very young lad drove a honda sports car at top speed round a busy roundabout and spun off the r'bout as a result of trying to turn off at such speed.. lost control of the back end and shot backwards across the road in front of us, narrowly missing 4 other cars and a driver who was forced to drive onto the pavement to 'get away' from it!

Should the young girls have to pay the high costs of their insurance claims.

I wish someone could explain this in a way to me that really makes sense? It is sexist... why isn't it positive discrimination by people frightened to concede that one group is higher risk than another, its ok for other risk factors, why not this one, apart from the fact that sex discrimination is actively at work in many other areas of life and there are rules to protect.

The rules for women who live longer, are supposed to be changing.. this is another biological difference. Some women die younger than many men who live longer than average lives, but as a group 'generally' life expectancy is higher.

Are there any actuaries with us prepared to comment on risk assessment factors?

[grimbletart]

Equality's good. Some you win, some you lose. That's life.

[KRITIQ]

Martin Lewis, the Money Saving Expert, was discussing this on the radio earlier. It's going to be a swings and roundabouts legal decision.

Yes, with car insurance, it means that risk factors can no longer be assigned on the basis of gender/sex. That means even where statistically, men are more likely to have accidents than women, this can't be used as a basis for deciding the the levels of premium. That will now only be based on things like the model of car, where you live, how you use the car, your occupation and your own driving record. At the moment, age can also be considered, but there may be moves afoot through the same process to remove risks assessed by age.

When it comes to pension annuities, however, the situation is reversed. Women tend to get lower payments because they are expected to live longer than men and it is assumed their "pot" will have to stretch longer than for a man. This ruling means that can no longer happen, so pension levels for women will now increase and for men they will reduce.

[EmmelineGoulden]

I don't think blanket policies would suit insurance companies. Market differentiation (which is what differeing prices based on sex or any other charateristic enables) gives bigger profits than a single price.

[mrscumberbatch]

Hello just came back to this thread, very interesting.

I think that the 'black box' insurance is going to be the only way forward for this.

My argument wasn't worded particularly well, the point that I wanted to make was that although men and woman should be considered equal, we are quite obviously different and if the data shows that a 'target group' is a higher risk than another, then surely it would be silly to ignore it?

Whether insurance should ever have been rated based on gender is another thing altogether. But it is what it is, we have the information and knowledge that we have collated.

I've never worked in life insurance but it would seem silly to rate men and women the same. There's all different bits. It wouldn't work.

With regards to blanket policies, although this would probably suit the insurance companies, it means that the majority of mostly safe drivers would have to pay over the odds for a minority of unsafe drivers. By doing this would we not be condoning unsafe driving by not penalising them?

[EmmelineGoulden]

PJ I missed that too. Great! Thanks for highlighting it here.

[OneHandFlapping]

Oops. Missed that PJ.

Not saying it's right or wrong, just that all types of insurance need to treat gender differences the same way - either they all take account of them, or they all don't. Anything else is cherry picking.

[PigletJohn]

we have already seen that men's annuities will reduce so that they can live out their shorter lives with a shorter retirement than women, and so get a worse return on their pension contributions.

[TheDoctrineOfSnatch]

Hi senua I think insurance pricing based on ageing is currently ok on the grounds that someone who paid a high price when younger can benefit from lower prices as they age. Whether this will change in time I don't know.

The best way to lower insurance premiums is to agree to the insurance box being fitted to gather data and to restrictions on driving eg time of day. If all new drivers of both sexes do this as a matter of course, it might be that, after a year or two, the majority of young women have lower individualised premiums than the majority of young men if they have driven more safely. Or it might be that everyone drives more safely because there is a direct financial penalty for not doing so, which would probably mean fewer road accidents, which would be great.

[LRDtheFeministDragon]

shriek, babies exist in society.

You can't do 'nothing' with a baby. You can't take a baby out of our gender-driven society and leave it in a room with only food and water. Obviously.

So, you cannot completely exclude nurture, so your attempts to study nature will not be perfect.

That's fine, that's a normal condition of study humans. But it is a condition.

I think it is possible there are natural brain differences (size would be an obvious one) between the sexes. I would be unwise to claim flat out that there are not, since we can't tell either way. But I certainly don't think it is 'widely acknowledged' that there are natural brain differences between the sexes. Nor do I think it could ever be 'widely acknowledged' amongst responsible scientists.

[Shriek]

Use of control groups in babies is not generally considered unethical, as in the control group, nothing is done, which is the point. Anyhow, irrelevant as these studies that I refer to (not directly quoted from, to be absolutely clear ;) exist, and are scientifically robust data, some of which, as I say, comes from naturally occuring examples, so no manipulation was required.

... but if you take the stance that there is no supporting evidence then you cannot take either stance, either for, or against, there being brain differences.... and I 'jumped in' as you put it, to clarify your point about there not being wide acceptance of brain differences. If you are truly saying that you don't 'disagree' there are differences, only that people are in general NOT accepting of that, I don't understand your point atall!

[OneMoreChap]

Well, a major step forward was implementing the same pension age... Way, way overdue, too.

[OneHandFlapping]

Hopefully they'll look at annuities next. What with women statistically living longer than men, they get lower annuities for the same lump payment.

I'm sure this is also discriminatory...