OK, so I spent 12 good years in the industry, but this court ruling boils my urine for unwanted interference

Premiums are priced to reflect the risk that the driver represents in terms of potential claims costs. Male driver claims costs are higher, and always have been, so they pay more.

Now the whole industrys pricing policy has to be skewed as this is discriminatory. It’s not discriminatory because they are men, it’s discriminatory as they are more financially costly.

Obviously as a bloke, I will benefit if insurers do reduce the cost – but what next? Is it discriminatory to charge young people more for car insurance? Is it discriminatory to charge people with Porsches more than Hyundai I10s?

Because if ALL drivers start having to share the costs of each other equally, any savings you see from being a bloke will be more then offset by the extra costs of sharing the claims from the youngsters!

The system was as fair as it could be in a market economy, wtf does this court ruling have to get involved?

(And I’m sorry for the cost of insurance for young drivers, but until the biggest cause of death and serious injury amongst young women is no longer their boyfriends, it will just be something we all have to go through)

Obviously as a bloke, I will benefit if insurers do reduce the cost

Bet it goes up for lasses rather than down for fellas.

Hmm. I guess the point is that bad/fast drivers are the ones who cost more money. There is some correlation between that and the gender of the driver, but that’s not causal.

I am not a fast, agressive or careless driver, so why should I have to pay up simply because other people who share my gender are?

It’s simply lazy analysis which results in unfair descrimination, isn’t it? In the USA, you pay more for insurance on red cars. That’s just as daft isn’t it?

Just to add an opposing viewpoint…

Speaking as another bloke, I agree entirely with you – as I understood it, premiums were calculated on the basis of an actuarial assessment of risk, so surely it’s only ‘discriminatory’ if it’s proven to be unfair.

As an older man, I share the same concern that, having argued successfully in this case, what’s to stop a case succeeding where the issue is discrimination on the basis of age, rather than gender.

I suspect that, rather than young men seeing their premiums reduce, all that will happen is that the premium for young women driver’s won’t reflect their lower risk level, and the prices will equalise upwardly!

Not true, their used to be a difference in claims when there was a difference in driving habits, it used to be that men tended to drive a lot more miles than women, which translated in men being more likely to have more accidents per year, and women more accidents per miles driven.
But driving habits are now pretty much equalised, especially for those under 30.

Statistically speaking, young brown men with backpacks and beards are more likely to be suicide bombers. I think we should charge them more for Tube tickets.

I am not a fast, agressive or careless driver, so why should I have to pay up simply because other people who share my gender are

If that’s true, then the longer you go on demonstrating that, the cheaper your car insurance will become – it’s called a No Claims Bonus. However, to begin with, the insurance company has nothing other than statistical data to work with to assess the level of risk your business would be.

It’s hard enough for young guys to get car insurance at the moment – I suspect a lot of insurance companies will simply take a conservative approach and increase the minimum age at which they are prepared to take on the risk.

Bloke from AA insurance suggesting women’s premiums up 25-30%, men’s down 10%. I’m fairly sure there aren’t almost twice as many men drivers.

The one I could never figure is that I’m a 48 year old male driver with about 20 years claim free motoring, and my insurance premium went down when I added my 35 year old learner driver wife to the policy.

(I suspect if our health insurance company saw her driving at the moment, they’d probably double our premiums)

theyve allowed for when she drives you home from the pub, you’re less likely to crash. Simples.

However, to begin with, the insurance company has nothing other than statistical data to work with to assess the level of risk your business would be

Statistical data from which they have chosen poor conclusions. I’m being penalised based on a chance relationship with another group. This is not fair.

And yes no claims does reduce my premiums over time, but I’m still out of pocket significantly am I not?

ditch jockey – couples are statistically less likely to crash than single males.

I was going to add my wife to my policy, except her disability prevents her driving a manual car and I didn’t fancy adding “fraudster” after my name along with “ACII ” and “Chartered Insurer”!

“I’m a 48 year old male driver with about 20 years claim free motoring”

I think on average an driver has an accident every 3 or 4 years, they can obviously see that you are overdue, and weight you premium accordingly.

MSP – thats not quite how premia work. They will adjust your cohort-based propensity to crash by factoring in your own personal claim history too. So if you have demonstrated an historical tendancy to not drive like a tard they’ll factor that in when pricing your risk.

Like gambling on red or black, probability of one event happening that is not connected to a previous event is not the same as having stochastic charactersitics based on your cohort.

Statistical data from which they have chosen poor conclusions. I’m being penalised based on a chance relationship with another group. This is not fair.

You are aware that this may well also impact annuities too so that mens pensions are likely to be reduced as it can be argued that it is “not fair” that women are penalised wrt annuity rates because on average they live longer. So where you may gain in some areas you are likely to lose out in others.

Stoner – Member

MSP – thats not quite how premia work. They will adjust your cohort-based propensity to crash by factoring in your own personal claim history too. So if you have demonstrated an historical tendancy to not drive like a tard they’ll factor that in when pricing your risk.

Like gambling on red or black, probability of one event happening that is not connected to a previous event is not the same as having stochastic charactersitics based on your cohort.

OK I will add some 😉 😉 😉 next time to help you recognise sarcasm.

booked in for recalibration 🙂

Insurance companies use all the data available to them to draw conclusions about risk. Nothing wrong with that even if, as molgrips says, some of the relationships aren’t causal. Gender has to be used as a proxy in absence of more granular behaviour data. The ruling is terrible.

If you want more ‘fairness’, then you have to provide insurers with better data so that they’re able to make a ‘fair’ judgement. For example, if cars had GPS systems which reported back driving behaviour — speeding, sudden braking, tailgating, etc., the insurance companies would be happy because it would allow them to judge risk much more accurately, and consumers SHOULD be happy because their premiums would be a direct result of their behaviours, and therefore fair.

But “we” are unwilling to give the insurers such info, and want to prevent them using the data that they do have. Boils my urine as well.

Gender has to be used as a proxy in absence of more granular behaviour data

I don’t agree. Just because you can’t come up with a fair means of doing something doesn’t make it ok to be unfair.

But “we” are unwilling to give the insurers such info

I’m not. Isn’t there a company now that gives you better premiums if you let them install a data logger in your car?

molgrips – Member

Gender has to be used as a proxy in absence of more granular behaviour data

I don’t agree. Just because you can’t come up with a fair means of doing something doesn’t make it ok to be unfair.

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The most unfair (and in fact dangerous) thing is to enforce a single premium for everyone, as that does not reflect behaviour, and therefore risk, at all.
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The most fair thing is for everyone to have their own premium calculated individually on the basis of their own accurate measures of likelihood to require a payout and that payout’s likely size.
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In between there is a contunuum of possibilities, and what the insurers are doing is moving as far down the line from unfair towards fair as the data they hold will allow them. I don’t see anything wrong with that, and would argue that the current system is more fair overall than one without the gender distinction, because it’s more fair on average (i.e. the difference between what you pay and what you expect to get paid over the life of the policy is smaller than it will be from 2013)
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I agree that the fairest AND most efficient basis for a risk assessment in motor insurance is likely to be driving behaviour, not demographics. But don’t let the perfect be the enemy of the good.
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Molgrips, it’s great that you would be willing to provide more granular and relevant info to the insurers about your driving habits. I wish more people were like you. Myself, although I believe that it would be best to share, and would rabidly argue for sharing, wouldn’t sign up voluntarily because my premiums would go through the roof. So actually, if I was completely self interested, I would be applauding the European decision. How stupid am i?

Hey, I can insure a 150mph motorbike for about £130 fully comp, so I don’t give a rats ass what anyone else pays! 😛

Insurance companies are only “allowed” to look at fairly basic characteristics about you to base a judgement of the risk they are taking on you: age, gender, previous accidents, convictions, home address etc. I’m sure if they had the chance they would love to have a device in each car that records how stupid you are and then tell you how much you need to pay on a daily basis…

This does mean that, sometimes, the characteristics are generalisations and are not necessarily the “truth” about an individual. So, for example, when I notified Direct Line about my change of name etc last year, my insurance went down. Was I suddenly a safer driver because of it? Of course not…

(actually, after having a blemish free driving experience for 20 years, I got flashed in Norwich two weeks after getting my new licence so maybe quite the opposite!!!)

Rachel

I don’t see anything wrong with that, and would argue that the current system is more fair overall than one without the gender distinction, because it’s more fair on average

What you should be comparing is the current system vs. the system without gender discrimination but with the addition of other factors which aren’t currently taken into account. You might be right in thinking it’ll be more unfair, OTOH insurers might be using it as an excuse to unfairly increase premiums for men, and that this will force them to reconsider how they assess risk.

You have to draw the line somewhere on what factors it’s acceptable to use. E.g. You can’t discriminate on the basis of race irrespective of whether there’s a correlation with higher/lower risk. Now that gender has come up there’s a big fuss about it because it involves change, but if in 10 years time someone were to suggest bringing back different premiums purely on the basis of gender I bet there’d be big opposition to it.

I never saw it as a problem, insurance policy cost is based on perceived risk (using statistics to back it up). For me its always been a benefit, as I drive far, far faster than average – so I’m a winner (less than £300 for a 535i). 😆

Adding my wife made bu99er all difference to my policy, and that same for her car with me – maybe this is an age/car issue.

One problem is that where people peceive the cost to be ‘outlandish’, they will claim – to get ‘their’ money back. Plus of course if its too expensive, people either fiddle it or drive without.

working within the industry – all i can say is we will be calculating risk according to first name(s). so pls feel free to change your names by deed poll to something feminine should you wish to make an insurance saving 🙂

You have to draw the line somewhere on what factors it’s acceptable to use. E.g. You can’t discriminate on the basis of race irrespective of whether there’s a correlation with higher/lower risk …

You seem to imply that we should be aghast at the suggestion of using race as a predictor of risk. I myself certainly am not. If it has a significant correlation, it should be used, nothing wrong with that. That is not racism, and denying the existence of differences between groups in face of unbiased and complete information to the contrary is political correctness gone beserk.
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What I do perceive as wrong is stubborn intolerance of particular races, genders, ages, etc. on the basis of blind and unresonable generalisations and in the face of contrary evidence. In short, bigotry. THAT is what racism, sexism, ageism, etc. are, and THAT is what we should work to avoid. But it’s not what’s happening here.

While we’re on the subject, the quickness with which our society applies these labels is gutless and lazy. It’s become more a matter of instinct than thought. Disgusting, and central to this argument.

I was about to say much the same thing (I alluded to it in the other thread, but no-one took the bait).

Why is it ok to base pricing or, ok, predict risk based on age but not gender? Or, why is it ok to base on gender but not race? Is it acceptable that I should pay more in one postcode than in another?

I’m not particularly arguing for a blanket “one size fits all” premium, but I think the arguments in favour of what is essentially prejudiced pricing makes for an interesting discussion.

What we’re saying, as far as I can gather, is that it’s ok to be prejudiced so long as those prejudices are born out of likelyhood rather than hate?

I think it depends on how whether the factor you’re using to assess risk has a causal relationship, or if it’s a proxy. E.g. Years of experience should be a valid factor whereas pure age might not be so, though you could argue that humans are inherently more likely to be involved in risky behaviour below a certain age. Similarly if you can show that there is a causative link between being male/female or white/black/asian/green then I think it would be valid to use that for assessing insurance risk, but if it just “comes out of the stats” then we should be looking at what the underlying factors are.

is there anything to stop a insurance company catagorising based on name?

for instance, if someone is called ‘steve’ they get a higher premium by someone called ‘shirly’

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What we’re saying, as far as I can gather, is that it’s ok to be prejudiced so long as those prejudices are born out of likelyhood rather than hate?

The words aren’t quite right:
Prejudice and objectivity are, by most definitions, exclusive, so that’s not right
Not likelyhood [sic], but objective evidence
Not hate, which can be well founded, but bigotry

I think it depends on how whether the factor you’re using to assess risk has a causal relationship, or if it’s a proxy

Come on. If all corporate decisions could only be made on the basis of causal factors, you’d have to submit your genetic sequence and a 10,000 page biography to change your calling plan.

The words aren’t quite right:

Fair enough. It should hopefully still be clear what I mean, but I take your point. Let’s see.

“… it’s ok to discriminate so long as that discrimination is born out of objective evidence rather than bigotry?”

Better?

Say I opened a shop.

If I had evidence that, say, incidents of shoplifting by people from Liverpool are significantly statistically higher than the rest of the country, I could put a “no Scousers” sign on my door. That’s ok, because I’ve nothing against Liverpudlians, but I’ve got proof that they’re more likely to steal from me.

Compare and contrast:

Say I opened an insurance company.

If I had evidence that, say, incidents of car thefts by people in Liverpool are significantly statistically higher than the rest of the country, I could increase my insurance premiums for people with Liverpool postcodes. That’s ok, because I’ve nothing against Liverpudlians, but I’ve got proof that they’re more likely to have their car stolen.

I doubt that statistics would prove scousers are any more likely to commit a crime than any other socially deprived area.

“no poor people”?

I doubt that statistics would prove scousers are any more likely to commit a crime than any other socially deprived area.

http://www.answers.com/topic/hypothetical

Introduce a cover charge, keep the riff raff out. That’s what plenty of places do.

Cougar, I ageree with you, on an intellectual level, but where do you stop? Particularly critical illness cover. It’s been ruled that companies can’t use genetic analysis for underwriting.

Surely that would be the fairest possible method?

OK guys some of you are making really poor arguments here. Allow me to point out the flaws:

This whole argument about whether it’s causal or not is deeply flawed.

You can never know the risk, no one has a crystal ball and there are, with very few exceptions, no causal realtionships that relate to this topic.

You cannot know, therefore you have to predict, which means you have to use statistics to predict the likelihood.

Secondly a lot of you are using binary discrimination arguments to make your point. These are also flawed.

No one is saying you are excluded from buying this service, they are just saying, the price to customer A is different to the price to customer B because they aren’t buying the same service, i.e. they are buying cover against a risk, but that risk is different with each person, ergo, the product is different, ergo the price is different.

If men were not allowed to buy insurance because they are a higher risk because they are men, then that would be an equivlent argument, but that’s not what’s happening here.

Finally, you use of ‘statistically’ needs to be sharpened up. The whole ‘scousers more likely to rob cars thing’, you’ll likely find that there is no correlation or if there is it’s pretty weak.

If men are 80% more likely to have a crash than women for the same miles driven, then that’s a pretty significant risk. If the perpetrator of a robbery is 6% more likely to be Liverpudlian or black, that’s barely outside the margin of error.

Really some of you should have paid more attention to maths at school.

If men are 80% more likely to have a crash than women for the same miles driven, then that’s a pretty significant risk.

But if there’s some underlying factor which causes men to present a greater risk than women it’s fairer to use that factor.

If the perpetrator of a robbery is 6% more likely to be Liverpudlian or black, that’s barely outside the margin of error.

Shouldn’t the margin of error depend on the sample size?