Insurance premiums to change after ECJ gender ruling

[roachcoach]

This is going to hurt a lot of people.

http://www.bbc.co.uk/news/business-12606610

The requirement for unisex insurance premium and benefits will start on 21 December 2012, giving national governments and the European insurance industry time to adjust

I suspect this will be a hot topic.

[kalniel]

Well everyone's premiums will go up firstly, then they'll eventually pull back down when competition starts to bite again.

Even more will now be made of the type of car you drive and the journeys that are being made I'd guess - if you can't discriminate outwardly by gender then you can discriminate by asking what kinds of cars, journeys, professions etc. do different genders tend to have. Time to buy that pink TT.

[roachcoach]

It seems an odd ruling - all it will mean is that everyone pays more.

Personally I never thought it was "discriminatory", it is backed by relatively solid data, just a bit crap overall reflective of a crap industry. But then I think insurance companies are a bunch of money thieving buggers anyway so gouging based x,y or z is in no way a shock to me

Thing is though, the industry is not price regulated - they can (and will) charge whatever they want, all that holds them back is the competition but there's absolutely no incentive to keep it low. wouldn't surprise me to see a price fixing headline shortly afterwards.

[Phage]

You can bet that their reaction will be merely to lift female premiums to the same level as their male counterparts.
Cash Flow ahoy !

[kalniel]

You can bet that their reaction will be merely to lift female premiums to the same level as their male counterparts.
Cash Flow ahoy !

Initially, sure. But then someone can become a market leader by just dropping their prices overall by a proportion of the extra income gained by doing so.. then someone else will want to undercut that.. etc.

[Funkstar]

Or looked at another way: The average HEXUS insurance premium will be going down!

Claims cost Z in total for the year, this is covered by X from male drivers and Y from female driver

z = x + y

This just means the claims burden will be split differently between the two genders. eventually.

[Phage]

Not sure I follow you ?

Profit= (Male Premium+Female Premium)-Costs

If costs are flat, and female premiums increase to male levels, then profit increases, which is a desirable outcome for the insurance firms.
Overall I expect that male premiums will decrease, but of course not by the same amount as the female premiums will rise. I do agree that Hexus, with a predominately male readership is likely to benefit. It just appears to be another way of the gouging the public.

[roachcoach]

That's my grump though - there is no reason for them to drop male premiums. Nothing compels them to.

They might eventually as a result of market forces but no compelling force outside that exists. If market force is enough, only time will tell.

[father smurf]

No more Sheila's wheels adverts?

[Phage]

No more Sheila's wheels adverts?

There's always a bright side.

[roachcoach]

People still watch adverts?!

[kalniel]

That's my grump though - there is no reason for them to drop male premiums. Nothing compels them to.

They might eventually as a result of market forces but no compelling force outside that exists. If market force is enough, only time will tell.

It's market forces that caused female premiums to be lower in the first place. Why didn't they charge more for them before and make more profit otherwise?

[oolon]

It also affects life insurance (Men live shorter lives on average), also annuity rates (pays for your pension), men get better rates as they don't live as long. It could also affect travel insurance particularly for older people.

[streetster]

OK... so, statistically young males are more likely to have (expensive) accidents than young females.

It has been ruled that it's not fair to descriminate based on gender.

Right. Surely it's not descrimination if there is evidence behind it. It's based on risk.

So, how long before they decide that it's not fair to descriminate based on age too? Shock horror, young people are paying more than older people... does that mean older people will pay more to make it fair? Saga insurance give benefits for being over 50, is this going to be scrapped?

I dont understand the logic here. If statistically more cars get nicked in one area than another area then the premium is going to be higher if you live in that area, if statistically more boys crash than girls then it makes sense for the premium to be higher. If you want to make it 'fair' then everyone pays the same regardless of the car/location/age/experience/gender/etc.

</rant>

[roachcoach]

It's market forces that caused female premiums to be lower in the first place. Why didn't they charge more for them before and make more profit otherwise?

I assume they started similar then as risk metrics were applied, the premiums only went up


You're very likely mostly correct I'm just inherently suspicious by nature of something which is a legal requirement, but has no legal controls over its costings and is a very non-trivial outlay. It's not like the usual "dont like it, dont buy it" is so easily applied to vehicle insurance.

I don't trust companies to operate in the interests of the consumer in such circumstance. Cynical? Absolutely. Justified opinion? Jury is out. Usually I'm the first to trot out the "a business is not a charity" remark but, for me at least, the legal requirement for this changes that landscape.


For context, I'm (this hurts) in my 30's, male and have pretty low premiums so I'm not a young 'un complaining about being charged three and a half grand for a food blender on wheels.




Edit: To save a double post - yes, I made the age argument to a mate. It's a matter of time on that one. There should be a burden of proof to demonstrate that the different rules/gender are baseless before it can be pulled up as 'discrimination'.

[Rave]

OK... so, statistically young males are more likely to have (expensive) accidents than young females.

It has been ruled that it's not fair to descriminate based on gender.

Right. Surely it's not descrimination if there is evidence behind it.

Erm, nope. It's discrimination:

http://en.wikipedia.org/wiki/Discrimination

It's based on risk.

So, how long before they decide that it's not fair to descriminate based on age too? Shock horror, young people are paying more than older people... does that mean older people will pay more to make it fair? Saga insurance give benefits for being over 50, is this going to be scrapped?

I don't particularly like age discrimination, but the last time I checked, men and women get older at the same rate.

I dont understand the logic here. If statistically more cars get nicked in one area than another area then the premium is going to be higher if you live in that area,

In theory (and it is only a theory in our country, where house prices are ridiculous) you get to choose where you live. Last time I checked, babies don't get to choose their sex.

if statistically more boys crash than girls then it makes sense for the premium to be higher. If you want to make it 'fair' then everyone pays the same regardless of the car/location/age/experience/gender/etc.

</rant>

No. If you want to make it fair, everyone pays the same as regards factors over which they have absolutely no control.

I hear this argument from people all the time....that because actuaries have accurately calculated the risk, it it fine to charge certain people more for a certain service. So let's take that argument to its logical conclusion. Black skinned Britons are statistically more likely to be detained at Her Majesty's Pleasure at some point- so let's put a higher rate of income tax on Black Britons to compensate for the statistically higher chance of having to bang them up. Statistically it makes perfect sense.

.....but morally it would be abhorrent. As was charging me more for my car insurance just because I was born male. My only regret is that it will take until late 2012 to take effect. That'll be 11 years no claims bonus, if my chutzpah doesn't get the better of me.

What none of the news stories bother to mention is that this ruling applies equally to all forms of insurance, including pension annuities. Since men tend to live 4 years fewer than women, they generally get a substantially higher payout when they buy an annuity. Is a female old person's cost of living substantially lower than a male's? Is it their fault they tend to live longer? I don't think so.

But should they have been allowed to retire at 60 vs 65 for men?

I guess. But what a travesty.