ECJ Ruling on Gender Equality: Car Insurance

[Timbuk2]

Insurance premiums to change after ECJ gender ruling

Insurers cannot charge different premiums to men and women because of their gender, the European Court of Justice (ECJ) has ruled.
Auntie

The decision means that women can no longer be charged lower car insurance premiums than men.

The court was ruling on a challenge by a Belgian consumer group Test-Achats.

It had argued that a current exemption for insurers contradicted the wider European principle of gender equality.

"Taking the gender of the insured individual into account as a risk factor in insurance contracts constitutes discrimination," the ECJ said.

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.

For car insurance, women are generally a lower risk to insure than men but will, in due course, have to pay the same premiums.

The ECJ decision will also affect the cost of buying an annuity - an annual pension - as women live for longer than men and so receive a smaller annual pension for the same pot of money.

The insurance industry has warned that the change will lead to men receiving a smaller annuity income than they do now when their benefits are brought into line with those for women.

Simon Douglas of AA Insurance told BBC News that the decision could add about £400 to the annual cost of car insurance for a young woman.

"Particularly for women under 30 where the difference is most extreme, they currently pay about half what a man would pay," he said.

"We could see their prices go up 25-30% and men's premiums could fall by about 10%."

Tom McPhail, a pension specialist at the investment firm Hargreaves Lansdown said the ECJ decision was a "seismic event which will fundamentally reshape the retirement landscape".

He predicted that annuity rates would equalise for men and women, at levels higher than female rates but "significantly worse" than current annuity rates for men.

"Rates will be volatile for the next few months as insurers monitor their new business and adjust their pricing in response to experience," Mr McPhail said.

Seems like a nonsense to me.

Women pay a lower car insurance premium because they are lower risk. Particularly those in the younger category when compared to the younger male equivalent.

There are certain aspects, circumstances, situations in life where men and women are simply not equal, or do not perform to the same consistent level.

Psychology behind the wheel of a car reflects a significant difference between the genders.

Women being forced to pay a higher insurance premium for the greater risk posed by men on the grounds that it is somehow discriminatory is ridiculous.

[Khendraja'aro]

Seems like a nonsense to me.

Women pay a lower car insurance premium because they are lower risk. Particularly those in the younger category when compared to the younger male equivalent.

There are certain aspects, circumstances, situations in life where men and women are simply not equal, or do not perform to the same consistent level.

Psychology behind the wheel of a car reflects a significant difference between the genders.

Women being forced to pay a higher insurance premium for the greater risk posed by men on the grounds that it is somehow discriminatory is ridiculous.

So, how do you think about medical insurance? With logic like that, surely women should pay more?

[Timbuk2]

So, how do you think about medical insurance? With logic like that, surely women should pay more?

If it can be demonstrated that the health costs for woman are generally higher than men, sure.

I don't know that health insurance is not different between the genders nowadays in any case.

There are so many variables to be taken into account when insuring for health. It'd surprise me if gender were not one of the more significant ones.

[Dreadnaught]

This is one of those things that "feels" wrong, but really makes a lot of sense. Insurance is based on statistically significant measures of certain factors. This can lead to the appearance of scientific discrimination, but without that methodology it doesn't work at all.

[Flixy]

I'd say lifestyle is far more significant, do they check for that? And is your premium also higher if you are, say, fat?

[Dreadnaught]

I think there are certain lifestyle choices they simply can't track or honestly verify without being invasive. Though there are some interesting ideas in this space:

BUSINESS FEBRUARY 4, 2011

How Am I Driving? Insurers May Know

By ERIK HOLM

After more than a decade of experimentation, auto insurer Progressive Corp. is on the verge of a nationwide unveiling of a new type of insurance that charges customers based, in part, on real-time information about how well they drive.

With a small device that plugs into a car's onboard diagnostic computer, Progressive can measure when a policyholder uses their vehicle, how far they drive and how hard they brake. Customers who volunteer to install the device can get a markdown on their auto insurance of as much as 30% after 30 days, and lock in a discount when they mail the device back after six months.

In the highly competitive world of auto insurance, setting prices based on data gathered directly from a customer's car is a major step forward, and gives Progressive a leg up on its rivals—for now, at least.

But rivals also see the advantages of using an onboard system, generically called "telematics," to gather more information on their customers, and are working on similar programs. In December, Allstate Corp. started offering a competing policy in Illinois, and State Farm and other insurers are experimenting as well.

Their work prompted Credit Suisse insurance analyst Vinay Misquith to warn in December that Progressive's temporary advantage may not last for long. As the other players enter the market in coming years, Mr. Misquith theorized they will collectively reduce profit margins on the safest risks, though he argued that the largest insurers—like Progressive, Allstate and State Farm—could "use their scale and better technology resources to more effectively price, gaining market share from smaller players."

Progressive's program is currently offered in about 30 states, and the company has been adding more every month. By April, the company plans to start running national ads touting the program, a change from targeting ads only at markets where the program, called "Snapshot," is currently available.

The Snapshot device combines a data recorder with cellular technology to allow Progressive to immediately compare its customers driving habits to data gathered from over a billion miles of testing. That allows the company to determine which participants in the voluntary program are less likely to get in an accident than traditional metrics might suggest.

They might find that a young single man who doesn't drive as aggressively as his peers, someone who only drives on weekends, and others whose habits wouldn't be shown by the standard information that insurers gather about their customers.

"Auto insurance pricing has been based on trying to find characteristics about a person and their car that would indicate how they drive," said Brian P. Sullivan, the editor of Auto Insurance Report. "Telematics is about determining exactly how a person drives, when they drive, and how far they drive. The entire concept of how we priced auto insurance up to now is poised to go out the window."

One major hurdle that still needs to be cleared: convincing drivers to plug the monitoring device into their car. Progressive is attracting customers by promising that the price of their coverage can only go down, not up, if they participate--though the worst drivers will get no discount. Richard Hutchinson, Progressive's general manager for usage-based insurance, said one in four people who qualify to participate in Snapshot sign on.

Adam Hagerman, 27 years old, an IRS employee living in a suburb of Washington, tried a pilot program from Progressive called MyRate in 2008, and came away a big fan of allowing the company to track his movements. After the company started gathering his data, he got a rate decline of about 15%.

"It helped me prove that I truly was a great driver," he said. "If I was a bad driver, I would have hated it."

Mr. Hagerman switched when he and his girlfriend, now his wife, got on the same policy, because of her poor driving history.

"I knew the program wasn't for her," he said.

Some consumers remain skeptical. Mr. Sullivan, who has been touting the advantages of telematics for years, said he would never agree to install such a device in his own vehicle.

"But I'm 53 years old, not 23," he said. "Privacy is a quickly shifting standard, and people are giving up more of it all the time."

Write to Erik Holm at erik.holm@dowjones.com

http://online.wsj.com/article/SB1000...954865544.html

[wiggin]

What's next? Not being able to discriminate based on age, so you can't have cheaper bus tickets for kids or senior citizens (or cheaper car insurance for middle aged drivers compared to the young or old)? Or tailoring your medical tests and differential diagnosis on the basis of genetic background is going to be outlawed since it discriminates based on race.

I know this is an unpopular thing to say, but for god's sake, men and women aren't the same and shouldn't be treated the same (same for different races, religions, genders, etc.). Obviously unwarranted discrimination is a problem that should be outlawed (as it is). But our society seems to be trending towards a strict interpretation of egalitarianism that assumes that all people are the same regardless of their physical and biological situation. It's hogwash, and leads to ridiculous results. Many products nowadays rely on complex models to appropriately set pricing, offer useful features, etc. To deny companies the ability to include obviously relevant information into these models is absurd.

[Ominous Gamer]

I don't know that health insurance is not different between the genders nowadays in any case.

There are so many variables to be taken into account when insuring for health. It'd surprise me if gender were not one of the more significant ones.

big ticket cases, like cancer, usually even out across the genders. Sure, women get more breast cancer, but men get more prostate cancer.
The main difference is giving birth, that shit is expensive, the insurnace my county uses allows us to opt out of pregnancy coverage for a lower monthly premium.

[earthJoker]

So, how do you think about medical insurance? With logic like that, surely women should pay more?

Erm, women do pay more.

Edit: I quickly checked the news, this ruling is not binding for Switzerland.

[Lewkowski]

Such stupidity. Glad I don't live in Europe.

[Khendraja'aro]

Erm, women do pay more.

Edit: I quickly checked the news, this ruling is not binding for Switzerland.

They don't over here.

Such stupidity. Glad I don't live in Europe.

Well, the feeling is mutual. Because in objective retardedness, the US still rules.

[Hazir]

So how is this 'more expensive for everybody' going to come about ? Is there any indication that there are significantly more men than women in traffic? It seems to me that what logically should happen is a reduction for men and an increase for women.

If that's not the case then premiums are simply rising for another reason. For example that insurance companies have found yet another easy excuse to gouge their customers.

[Nessus]

What's next? Not being able to discriminate based on age, so you can't have cheaper bus tickets for kids or senior citizens (or cheaper car insurance for middle aged drivers compared to the young or old)? Or tailoring your medical tests and differential diagnosis on the basis of genetic background is going to be outlawed since it discriminates based on race.

I know this is an unpopular thing to say, but for god's sake, men and women aren't the same and shouldn't be treated the same (same for different races, religions, genders, etc.). Obviously unwarranted discrimination is a problem that should be outlawed (as it is). But our society seems to be trending towards a strict interpretation of egalitarianism that assumes that all people are the same regardless of their physical and biological situation. It's hogwash, and leads to ridiculous results. Many products nowadays rely on complex models to appropriately set pricing, offer useful features, etc. To deny companies the ability to include obviously relevant information into these models is absurd.

This reminded me of Luce Irigaray for some reason.

[wiggin]

So how is this 'more expensive for everybody' going to come about ? Is there any indication that there are significantly more men than women in traffic? It seems to me that what logically should happen is a reduction for men and an increase for women.

If that's not the case then premiums are simply rising for another reason. For example that insurance companies have found yet another easy excuse to gouge their customers.

AFAIK no one said it would make everything more expensive; the FP article suggested things would get about 10% cheaper for men. (BTW, men generally do drive more miles than women, at least in the US.)

This reminded me of Luce Irigaray for some reason.

The writing or the sentiment? I guess I can't be too upset - anyone who uses terms like 'phallocentric discourse' seriously must have been fun to read.

[Nessus]

The writing or the sentiment? I guess I can't be too upset - anyone who uses terms like 'phallocentric discourse' seriously must have been fun to read.

Going against statistical arguments based on nothing but ideals on equality. I quoted you because we seem to be in agreement on the issue

[agamemnus]

Irrational reverse-discrimination based on political correctness instead of facts: not just in the US anymore!

...

Well, I guess this would be reverse-reverse-discrimination.

[GGT]

Actuarial science ought to be able to show how their models are appropriate, and that doesn't mean "unwarranted discrimination". Teenagers are more reckless at driving than anyone else, male teens especially. But older people are risky drivers, too! There's a whole menu of variables used, from miles driven to work, driven for work, to the type and age of car.

Do they charge more or less for drivers with easy access to public transport, but instead choose to drive a car in congested urban cities?

[Hazir]

I misread the title. By the way, did anybody notice the date on which this will enter into force ? 21 12 2012 Wasn't that the day the earth is supposed to come to an end ?

[LittleFuzzy]

I misread the title. By the way, did anybody notice the date on which this will enter into force ? 21 12 2012 Wasn't that the day the earth is supposed to come to an end ?

Beats me, but I can't help but think they chose that date to screw with dyslexics.

[RandBlade]

I'm honestly torn on this issue.

On the one hand I think that actuarial science is not discrimination.
Ot the other I think that its funny how for years the same people have gone on about discrimination and the rules were set up to block it, but allow the likes of Sheila's Wheels.

Don't blame the ECJ, this is the natural evolution of the laws that have been passed.

[Aimless]

I don't get it. Isn't the problem that men were discriminated against because of their gender and so had to pay more? Isn't the solution of the problem to lower premiums for men?

[Lor]

Beats me, but I can't help but think they chose that date to screw with dyslexics.

[Khendraja'aro]

I'm okay with discrimination when it's about something you chose for yourself.

I'm against discrimination when it's something you are not really able to influence.

[RandBlade]

I don't get it. Isn't the problem that men were discriminated against because of their gender and so had to pay more? Isn't the solution of the problem to lower premiums for men?

No, men were "discriminated" against because men are higher risk and insurance is about mitigating risk. Women benefited because women were lower risk.

This was not grounded in conjecture or blind discrimination but in actuarial science and fact.

If insurers can't take gender into account then women will have to pay more, men less.

The gender balance is reversed when it comes to retirement and buying annuities. Women have nearly a 5 year longer life expectancy than men, so a man retiring gets a higher annuity from the same savings pot as a woman does - because the actuaries expect him (rightly) to on average die sooner. Men will now get less from their pension than they previously would.

[Lebanese Dragon]

I'm okay with discrimination when it's about something you chose for yourself.

I'm against discrimination when it's something you are not really able to influence.

I'm more open than that... It seems horrible, and it sucks to be on the losing end of something, but life is life, you have what you are dealt. People are going to interact with you based on that. Whether it was a chosen life path, or one that you just naturally have, all that information is relevant in making a logical and informed decision. If your looking for a new choir teacher at your school and the candidate applying beats every other candidate on paper, but is blind and deaf. you can't hire them for that position. it's discrimation, but it has a reason behind it, it's not a blind hatred toward the blind.


I really think what is to be defined as descriminatory and as statistical needs to change. If they find a quality inherantly related to being a woman and make a decision based on that, that's not sexism. If they make a decision solely based upon someone is a woman that is discrimination. If it's like your employer just likes women more, and it has no bearing on the context of the work at hand those are the cases of sexism.

If it turns out men are more likely to rob banks than women and so on security cameras they often hone cameras on men more than women. That's not sexism, just playing the odds. It's not because they're men it's because of the qualities that for whatever reason by statistical fluke, by natural tendancies, by socially different upbringing of men have led to suggest that men have a higher chance of robbing a bank.

Same thing with racial profiling. It's one thing to be a racist it's another to know if your country is at war with a certain group of people that perhaps people from there may be statistically higher to want to cause you harm. And if you have a finite amount of resources it is rational to watch them more closely than the lower risk individuals.

[earthJoker]

They don't over here.

Well, different countries different laws. But in Germany it depends on your income.

[Being]

I'm okay with discrimination when it's about something you chose for yourself.

I'm against discrimination when it's something you are not really able to influence.

Might want to think that through a little more. People choose their religion. People choose abortion or right-to-life. People choose political parties.

[Lebanese Dragon]

No one really commented on it, but I think what I said makes a lot of sense, does most people agree with that. I definitely would say it goes against a mainstream notion of discrimination, in that i advocate that it can be okay to take in factors of religion, gender etc... but the reasoning must be something that statistically accompanies people having one fo those qualities not the quality itself.

Let's say you're hiring for a warehouse job, and guys are known to be naturally taller and stronger, generally speaking, and you can only interview so many wouldn't it not be opitimal (objectively) to check more of the guy applicants.

[Khendraja'aro]

Might want to think that through a little more. People choose their religion. People choose abortion or right-to-life. People choose political parties.

Ah. And do republicans become ill more often than democrats?

[Hazir]

Interestingly Rand made the most relevant remark; it's useless to talk about whether or not the court came to the right conclusions now. Their conclusions today became inevitable years ago when the EU legislation was passed by the Council and Parliament. But as these things go then everybody was sleeping because for some odd reason people don't seem to think it' s real when the decision is taken in Brussels (unless of course it's about the curvature of the banana, then the media can' t get enough of it).

You' d really have to ask those insurers with their horror stories about raised premiums and lowered annuities where they were when this became law years ago.