[Closed] EU Insurance ruling

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 [i]older[/i] 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 [i]down[/i] 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 [b]chance[/b] 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 🙂
[img] [/img]

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.

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 ...

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'

?

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.

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

I'm not convinced there's a lot of science behind the justification of premia, if you enquire they don't seem to be able to come up with a sensible explanation.

I once enquired about van insurance as I was thinking about a small Citroen. When they found out that I would be carrying a competition motorcycle they got a bit chairy saying that I could have a professional rider in the passenger seat which might involve large claims for loss of earnings in the event of an accident.

Leaving aside that any driver could have a high earning passenger in any vehicle, I pointed out that the only professional rider in Britain (at that time) in that particular branch of the sport was not an acquaintance and lived hundreds of miles away so the likelihood of their scenario was nil they came out with the "ah but" stuff.

They realised they had painted themselves in to a corner when I pointed out that they had happily insured me for twenty years to tow a three bike trailer and thus, using their logic, I could have had [u]two[/u] professional riders in the car.

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

I think, but could be wrong (because although I paid attention in my stats class, I wasn't top of the form) that the margin of error is usually the 2.5% at either end of a normally distributed population, i.e. a total of 5%, the outliers that cannot be accounted for.

Sample size is important, but for any given 'population' (and the key word here is population) a sample size of 30 is enough to give a reliable prediction of future events. The problem is that your 'population' has to homogenous. Something that hoomans are not very good at.

I'm not convinced there's a lot of science behind the justification of premia, if you enquire they don't seem to be able to come up with a sensible explanation.

Probably because you're talking to a keyboard monkey. The guy/girl who wrote the pricing algorithm is sitting in a comfortable house in the home counties at the long end of 7 years minimum studying Dead Hard Maths and a few years writing pricing algorithms.

And where the hell did we get "premia" from? 7 years in insurance and this is the first I've heard of it.

Cougar, I ageree with you, on an intellectual level,

That's good, I'm not overly sure I do. I'm just trying to spark some discussion.

It's very easy to go "yeah, well, it's the fairest way of calculating insurance is to do a risk assessment. We know that those young people are all hooligans, that if you live in Liverpool you're going to get your alloys stolen, and that women never go above 40mph so when they hit things they don't do as much damage; but of course, you can't take national descent into account because that's racist." But when you stop and think about it, however you look at it, it's a massively hypocritical situation and we take it as normal (and argue about it on the Internet).

I'm not actually suggesting that the insurance procedure changes, particularly. I'm not sure as I've reached a firm conclusion either way, and I don't really want to be paying through the nose so that Johnny Halfwit can pass his test at 17 and get a Subaru Impreza. (Off the top of my head maybe a fuel tax would be fairer, sporty cars and higher mileage drivers are both higher risk and would pay more accordingly? I don't know, I've not given it a lot of thought.)

Point is, I just can't help wonder why this is the only industry that's allowed to do it, and why some demographics are acceptable grounds for analysis and some cause all our knees to jerk.

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.

Ok. How would people feel if the London Tube security were routinely checking that young males with tanned complexions, beards and rucksacks weren't carrying large quantities of explosives (assuming they have this power legally)? After all, the statistical evidence here for terrorism demographics (post-IRA days anyway) must be close to 100%. That's just using risk assessment to better deploy your manpower.

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.

Well no, your example recognition needs to be sharpened up. I never said (or intended to imply) that there was a correlation, I said "[b]If[/b] I had evidence that..." and even clarified that it was hypothetical in a follow-up post.

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

I suspect that you're assuming that a causal factor will be more tightly correlated to whatever you're trying to predict than any proxy, and what you actually want, if you really get down to it, is not causality but very strong correlation. That's fine, it's undeniable that (higher correlation)=(better prediction)=(fairer premium), no argument there. The thing about cause is that:

1. To untangle all the causes of a particular behaviour/phoneomenon, particularly if it's human, can be fiendishly difficult or impossible. A proxy (like the red car example) can be better, and therefore fairer, than an incomplete model of cause-effect.

2. Even if you somehow manage to untangle all the causes of something, they may not be measurable or practical to measure. So an easily collected proxy may be your best bet at fairness, even if it's not perfect.

Like I said before, don't let the perfect be the enemy of the good.

And where the hell did we get "premia" from?

Premium: Noun [url= http://en.wiktionary.org/wiki/premium ](plural premiums or premia)[/url]

Cougar - there is a HUGE amount of data nehind premium rating, it's just that as you only speak to a customer service drone nowadays rather than an actual underwriter, they won't have a clue!

How would people feel if the London Tube security were routinely checking that young males with tanned complexions, beards and rucksacks weren't carrying large quantities of explosives

I would think that al qaeda will certainly be stepping up recruitment amongst 70 year old chinese women.

Just found out that it's the Belgians that are to blame for all of this. Pesky Belgians, what good has their existance ever done?!

I would think that al qaeda will certainly be stepping up recruitment amongst 70 year old chinese women.

(-:

's not the same. The whole point is to instil terror by the act of someone so dedicated to their cause that they're willing to die for it. You're supposed to feel hopeless in the face of their fanaticism, or something. An "outsider" bomber wouldn't be the same, you might as well just hide a bomb.

Pesky Belgians, what good has their existance ever done?!

Apart from the beer, and the chocolate, and the waffles? And, curry ketchup.

it's a massively hypocritical situation and we take it as normal

Hear hear.
That's why there shouldn't be any variables which are off limits.

Touche Cougar, actualy have a bottle of Curry Gewurz Ketchup in the cupboard! The g/f is half Belgian too, but that doesn't count 😉

Which half?

I was kinda going for the "Romans, what have they ever done for us" thing, but I don't think it worked.

The whole point is to instil terror by the act of someone so dedicated to their cause that they're willing to die for it

Is it?!
My impression is that al qaeda et al are waging a war using any and all means available to them, and wouldn't be too picky about the method of delivery. It's just that suicide bombers can be efficient without the need for great technological sophistication.

In fact I'm not sure if I'd be more terrorised by those who blow themselves up for religion than those who hide bombs for money. The second one is scarier.

But maybe you're right, because it's true that people dying for their beliefs does hold a certain special message.

Assuming you ARE right, and if the tube decided to start searching people, tanned beardies with backpacks do seem like an effective place to start. IF the goal is to find terrorists. If the goal, on the other hand, is to make you feel all warm and fuzzy inside, random will do.

Which half?

left iirc

Yup, went over my head

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

...and how much does [url= http://en.wikipedia.org/wiki/Steve_Shirley ]Steve Shirley[/url] pay for insurance?