Insurance gender equalisation directive.

Henry Ford III

Anyone any thoughts on this? It's due to kick in just over a month.

From a motor perspective it means an end to discounted "Lady Drive" policies, and that women's premiums will rise. Reckoned to be c. €300 p.a. extra in younger lady drivers.

Mens premia may fall marginally.

It has knock on effects on other classes of insurance, notably life insurance where female rates will also increase, and also income protection where female rates will actually decrease.

My view is rates should be based purely on risk, and if proper risk analysis shows ladies to have a lower number of motor claims, and at less cost per claim then they should pay less for their cover.

Alanstrainor

What annoys me, is that this "gender equality" only benefits the companies that provide these policies. Women pay more, and men will pay the same. It's a joke.

Despite being a /young male/ who pays through the nose for insurance on a relatively high performance car. I agree, it should be based on risk.

djimi

Im in favour of it in so far as the difference between male and female policy prices, especially for young/inexperienced drivers, was complete nonsense, and completely out of proportion with the risk involved. To give an example it cost me €2500 to insure my first car (1.4 Accent) having had a full license for two years at that point, whereas my girlfriend ended up paying something like €900 to insure her 1.4 Polo immediately after passing the theory test. I dont care what criteria or risk assessment they use; that kind of discrimination simply could not be allowed to continue.

How much of a difference it will make, and how the divide is going to be sorted, remains to be seen however. Insurance companies are not going to lose money on this, so I suspect everyone is going to end up paying for this in the long run.

As for risk assessment as a means of determing prices; I am a great believer in everyone starting with an equal clean slate, and loading accordingly if and when a claim occurs. To me that is the fairest way to handle it. Not that I hold my breath for such a system to come into place.

corktina

with an Insurance background, it sticks in my throat a bit. Women generally are better risks, they drive less miles and have less accidents,this is also the case with other definable groups such as Older Men, certain occupations etc and I see no problem with groups likes these paying less than higher risk groups.

Charging Women more for their policies in order to be seen to be gender-neutral is in fact discriminating AGAINST Women

TherapyBoy

djimi wrote: »

...it cost me €2500 to insure my first car (1.4 Accent) having had a full license for two years at that point, whereas my girlfriend ended up paying something like €900 to insure her 1.4 Polo immediately after passing the theory test.

The problem I have is that now you'd still be charged €2500 but your girlfriend would be charged €2500 also. The insurance company is the only party that gains.

Mr.David

It makes sense to base the premium on risk and so for men to pay more than women.

This approach could be extended to all sorts of differentiators. For instance, how does religion or ethnicity relate to risk? Do muslims crash more than jews? Do hispanics claim more often than africans?

There are a lot of different ways you could pull it apart, and why not? Statistics are by their nature representative and so 'sexism' or discrimination doesnt enter into it.

Anjobe

Mr.David wrote: »

It makes sense to base the premium on risk and so for men to pay more than women.

This approach could be extended to all sorts of differentiators. For instance, how does religion or ethnicity relate to risk? Do muslims crash more than jews? Do hispanics claim more often than africans?

There are a lot of different ways you could pull it apart, and why not? Statistics are by their nature representative and so 'sexism' or discrimination doesnt enter into it.

I really thought society had made more progress than this! Making assumptions about an individual based on characteristics associated with their gender, race, religion, sexual orientation etc is the very basis of discrimination.

All the statistics tell us is that women as a group are a lower insurance risk than men, they say nothing about any individual woman or man, so using an individual's gender as a basis for calculating their insurance premium is discriminatory.

Zubeneschamali

I'm absolutely confident that a statistical analysis would show black people are a worse risk in Ireland than white people, but you are not allowed to base quotes on statistics like that because it is racist, and quite right.

(Why do I think that? Because a much higher proportion of black people in Ireland would be recent immigrants than white people.)

Similarly, men, women, sexism.

Next up: age-ism.

Chris_Heilong

I have seen more woman tip cars and cause minor damage in car parks, dont know about men as I have never seen men do the same so for me women are a risk. everyone should start on the same level and over time and including claims these levels will go up or down.

Turbulent Bill

Zubeneschamali wrote: »

I'm absolutely confident that a statistical analysis would show black people are a worse risk in Ireland than white people, but you are not allowed to base quotes on statistics like that because it is racist, and quite right.

(Why do I think that? Because a much higher proportion of black people in Ireland would be recent immigrants than white people.)

I don't want to open a can of worms of this, but wouldn't a statistical analysis of risk be a good way of deciding premiums (in the absence of relevant driving experience) for black people, in the same way that it would for any other general group (male, female, young, old etc.)? It's not discrimination on the grounds of race, it's just matching you to your nearest overall peer group as there's no previous driving history. There would obviously be a weighting of other risk factors (age, gender etc.) too.

What's the relevance of being a recent immigrant?

Zubeneschamali

Turbulent Bill wrote: »

What's the relevance of being a recent immigrant?

On average, who do you think is a better risk: a recent immigrant from Nigeria, or someone of the same age raised in Dublin?

Turbulent Bill

Zubeneschamali wrote: »

On average, who do you think is a better risk: a recent immigrant from Nigeria, or someone of the same age raised in Dublin?

All things being equal, the Dublin-raised person should be a better risk given their familiarity with Irish traffic etc.

That wasn't what I was getting at though. You seem to be conflating race with nationality. I'd assign the same risk to a recently-arrived black Nigerian as I would to a white Nigerian or another immigrant of any race or nationality, again all things being equal.

Del2005

corktina wrote: »

with an Insurance background, it sticks in my throat a bit. Women generally are better risks, they drive less miles and have less accidents,this is also the case with other definable groups such as Older Men, certain occupations etc and I see no problem with groups likes these paying less than higher risk groups.

Women have more crashes, they are usually low speed bumps with few injures so the payout is less. Men have higher speed crashes which generally result in more serious injuries and bigger payouts.

corktina wrote: »

Charging Women more for their policies in order to be seen to be gender-neutral is in fact discriminating AGAINST Women

That wasn't the point of the law. Insurance companies are having their cake and eating it. We'll have to see if the EU cracks down on this, but it'll be a good few years. Just look how long it took then to sort our mobile roaming.

H3llR4iser

Chris_Heilong wrote: »

I have seen more woman tip cars and cause minor damage in car parks, dont know about men as I have never seen men do the same so for me women are a risk. everyone should start on the same level and over time and including claims these levels will go up or down.

Well the problem here is that the whole "risk calculation" thing is intrinsically and purposefully biased towards non-normalized results.

Saying that women are lower risk because they drive less frequently and on shorter routes than men is, on a logical standpoint, the same as claiming that unicycles are the safest means of transportation since only a few individuals die each year riding one; Because the money paid to claims by insurance companies is an absolute value it makes sense to look at data from an absolute perspective.

On a further note, although I have no solid data to back this up (would be great if anybody can provide some), I strongly suspect the average value of an individual woman's claim to be considerably lower than a man's - if you drive less often and for less miles, you're more likely to get into a traffic light read-ending incident rather than a motorway pileup.

So, from a purely, ice cold mathematical standpoint, the companies reasoning is perfectly legit.
However, when we consider the main factors considered when calculating an insurance premium, there is an interesting situation coming out:

NCB is something drivers have control and responsibility over; If they don't crash, they accumulate bonus and deservedly pay less.

Age and Experience might be debatable, but they're fair and an universal denominator; Every driver will go through the stage of being newly licensed. Although the hikes for young drivers are absurdly high, they apply to everybody in the same situation and the scenario is only temporary - they won't be 18 forever.

Gender is were the ball drops. It is an innate characteristic, immutable in time and one the drivers have no control over (for the sake of simplicity, we won't consider gender change cases). In fact, as somebody pointed out, it is no different than it would be using and individual's ethnicity to determine his or her premium. A male driver will be condemned to forever pay a higher premium than a woman of the same age and NCB.

Unless we apply a fairer method...what if we join women and men in one group, called "drivers", the same way that (rightly so!) all ethnicity, professions and whatnot are grouped in "men" and "women"? Certainly the "lower risk" women would balance out the "higher risk" men and the premiums could be balanced somewhere in between. Somebody would say that it's not "fair" towards women and that's exactly the horse insurance companies have been riding for years; It is equally unfair to paint all men in the same "crash boy" league and make them pay through their noses.

My feeling in that insurance companies drive business through reduced premiums for women; In western culture driving is a requirement for men, regardless of there being a true necessity to do so. Cars are a big part of the "manly" culture, men are expected to pick up their date/girlfriend/wife and drive her home and so on and on and on. Insurance companies can hike the prices up, men have no choice but to pay.

Women, on the other hand, can easily do without driving unless absolute necessity arises. There is no sociocultural expectation from them to be driving, having a car has never been an indication of "status" for a woman, and it is not only acceptable but welcome that their partners drive them around. They really need a car only if their place of work or study is not reachable otherwise.

For this reason, I'm not 100% sure the insurance prices for women will simply be equalized to those for men; If that will be the case, insurance companies might actually lose a bit of income as a number of women who don't really need a car but have one for practical reasons will just stop driving...

tritium

All gender is in a risk premium is a variable in a model. It's included because it's predictive. If you can't use it then you go and find some other predictive variables to power the model, simple as.

Part of me is against removing valuable data from a model (the quant in me) however there are many instances where men don't get a valid risk differential based on gender so "all or nothing" kind of seems fair

RandomAccess

Chris_Heilong wrote: »

I have seen more woman tip cars and cause minor damage in car parks, dont know about men as I have never seen men do the same so for me women are a risk. everyone should start on the same level and over time and including claims these levels will go up or down.

Based on the number of drive aways from these incidents, and the number of badly scraped bumpers I see unrepaired on cars I think the problem with these is they are not reported and not claimed for against insurance.

If every woman in the country roughed up their own car against walls every day and bumped other people's cars every week but didn't bother doing anything about it then this will have no impact on insurance ratings.

I'm not saying women do this, just that if they did it would never appear on the radar of insurance companies.

Companies here have it easy, in the uk people care more for their car and will claim for it to be repaired. The fear of losing no claims here is sometimes a false economy.

Colonel Sanders

tritium wrote: »

All gender is in a risk premium is a variable in a model. It's included because it's predictive. If you can't use it then you go and find some other predictive variables to power the model, simple as.

What if its zero correlated with every other factor?

Edited to add I'm not playing devils advocate here, I've found gender to be VERY lowly correlated with factors when looking at GLMs

jackofalltrades

Zubeneschamali wrote: »

I'm absolutely confident that a statistical analysis would show black people are a worse risk in Ireland than white people, but you are not allowed to base quotes on statistics like that because it is racist, and quite right.

Insurance companies are exempt from equality legislation when providing quotes, as long as they can back it up with statistics.

Chris_Heilong wrote:

I have seen more woman tip cars and cause minor damage in car parks, don't know about men as I have never seen men do the same so for me women are a risk.

Insurance statistics seem to back this up as well. If all cases of small tips/scrapes that occurred in car parks led to a claim against a motor policy, women drivers premiums would see an increase.

The only way to be fair is either to have full discrimination across all insurance products or none. And since women can't be charged more for private medical insurance I see the ECJ ruling as a chance to level the playing field.

Henry Ford III

Anjobe wrote: »

I really thought society had made more progress than this! Making assumptions about an individual based on characteristics associated with their gender, race, religion, sexual orientation etc is the very basis of discrimination.

All the statistics tell us is that women as a group are a lower insurance risk than men, they say nothing about any individual woman or man, so using an individual's gender as a basis for calculating their insurance premium is discriminatory.

Insurance is all about pooling risk and calculating premia based on certain assumptions.

If stats. back these assumptions and show for example that females travel fewer miles, have less accidents, run up less penalty points and convictions, then it's only reasonable for them to pay less for their insurance I'd suggest.

I think this directive is badly thought out and is a mere p.c. exercise.




p.s. The amount of imaginary insurance stats. here is actually pretty amusing.

Anjobe

Henry Ford III wrote: »

Insurance is all about pooling risk and calculating premia based on certain assumptions.

If stats. back these assumptions and show for example that females travel fewer miles, have less accidents, run up less penalty points and convictions, then it's only reasonable for them to pay less for their insurance I'd suggest.

I think this directive is badly thought out and is a mere p.c. exercise.




p.s. The amount of imaginary insurance stats. here is actually pretty amusing.

Its still discrimination, as the statistics only provide information about the groups themselves and provide no information about individuals within the group.

I'm sure that women statistically take more time off work than men, because of maternity leave. Does this mean it is OK for businesses to discriminate against women in recruitment and promotions? No, of course not!

Discrimination is descrimination whether or not it seems reasonable in some circumstances, it should be opposed on principle.

Mr.David

Anjobe wrote: »

Its still discrimination, as the statistics only provide information about the groups themselves and provide no information about individuals within the group.

I'm sure that women statistically take more time off work than men, because of maternity leave. Does this mean it is OK for businesses to discriminate against women in recruitment and promotions? No, of course not!

Discrimination is descrimination whether or not it seems reasonable in some circumstances, it should be opposed on principle.

I think you have a bit of a problem grasping the relevance of statistics here!

Of course they only make assumptions about the group, that is the way it works for age groups, for sexes, for determining risk of theft based on where you live.

What would you propose, an individual assessment of everyones risk?!

I'm not suggesting that they start deciding premiums based on religion or ethnicity merely making the point.

If its got a statistical underpinning, it cannot be racist as it is not a matter of opinion it purely reflects reality.

Anjobe

Mr.David wrote: »

I think you have a bit of a problem grasping the relevance of statistics here!

Of course they only make assumptions about the group, that is the way it works for age groups, for sexes, for determining risk of theft based on where you live.

What would you propose, an individual assessment of everyones risk?!

I'm not suggesting that they start deciding premiums based on religion or ethnicity merely making the point.

If its got a statistical underpinning, it cannot be racist as it is not a matter of opinion it purely reflects reality.

No, I am not misunderstanding the relevance of the statistics, bit I think you are misunderstanding the nature of discrimination. Just because women as a group are a lower risk then men has no relevance to the risk associated with an individual. There will be some men make very few claims over a lifetime of driving, and some women who make many - the current system that ensures that those low risk men pay more for their insurance than those high risk women is most certainly discriminatory.

The idea that everyone should start at the same motor insurance premium, irrespective of age or gender, which can then be adjusted up or down over time depending on their claim record, as has been suggested by others, is so obviously the fairest. The problem is that the industry has tied itself into a knot over dubious competitive practices like no claims discounts and cherry picking lower risk customers by offering them lower premiums.

spurious

H3llR4iser wrote: »

Women, on the other hand, can easily do without driving unless absolute necessity arises. There is no sociocultural expectation from them to be driving, having a car has never been an indication of "status" for a woman, and it is not only acceptable but welcome that their partners drive them around. They really need a car only if their place of work or study is not reachable otherwise.

:eek:
Welcome to 1952.

I'm so glad all those women have their partners, presumably big strong manly men, to drive them around.

The only ones who gain by the insurance gender equalisation are the insurance companies, god love them.

Henry Ford III

Anjobe wrote: »

Its still discrimination, as the statistics only provide information about the groups themselves and provide no information about individuals within the group.

I'm sure that women statistically take more time off work than men, because of maternity leave. Does this mean it is OK for businesses to discriminate against women in recruitment and promotions? No, of course not!

Discrimination is descrimination whether or not it seems reasonable in some circumstances, it should be opposed on principle.

The individual, in relation to the assessment of a pooled risk is by it's nature irrelevant. There are no stats on the individual, no record, no proof of anything. The stats exist on the group and are as just and equitable basis for underwriting as is available. If the individual can show from there that they should be entitled to a discount so be it.

To offer an established higher risk the same premium as that offered to a lower risk is actually discriminating against the lower risk - who might be statistically safer by experience, gender, qualifications, location, or several other variables.

Claims stats unarguably show for example that inner city dwellers, younger drivers (particularly males), and drivers of more expensive and higher performance cars will have more frequent and more expensive claims.

Is it discriminatory to charge them more because of that?

Henry Ford III

Anjobe wrote: »

No, I am not misunderstanding the relevance of the statistics, bit I think you are misunderstanding the nature of discrimination. Just because women as a group are a lower risk then men has no relevance to the risk associated with an individual. There will be some men make very few claims over a lifetime of driving, and some women who make many - the current system that ensures that those low risk men pay more for their insurance than those high risk women is most certainly discriminatory.

The idea that everyone should start at the same motor insurance premium, irrespective of age or gender, which can then be adjusted up or down over time depending on their claim record, as has been suggested by others, is so obviously the fairest. The problem is that the industry has tied itself into a knot over dubious competitive practices like no claims discounts and cherry picking lower risk customers by offering them lower premiums.

Nonsense.

Low claim males will earn a ncb, and high claim females will pay a loading.

The notion of everybody starting with the same premium is ludicrous too.

Dubious practices? Nah. Cherry picking is good for business. Insurers are quite entitled make profits.

Anjobe

Henry Ford III wrote: »

Low claim males will earn a ncb, and high claim females will pay a loading.

No - the NCB only takes a history of 5 years into account. A male driver who has had many years of claim free driving and 1 recent accident will pay a higher premium than a female who has a history of regular accidents/claims.

Henry Ford III wrote: »

The notion of everybody starting with the same premium is ludicrous too.

Why? The only argument against this that I can see is the pain of unpicking the current mess.

Henry Ford III wrote: »

Dubious practices? Nah. Cherry picking is good for business. Insurers are quite entitled make profits.

Just because its good for business does not mean its not discriminatory.

Zubeneschamali

Henry Ford III wrote: »

Insurers are quite entitled make profits.

Yes, within the law. So, no discrimination on the basis of gender, race, religion etc.

No matter what profit they could make.

H3llR4iser

spurious wrote: »

Welcome to 1952.

I'm so glad all those women have their partners, presumably big strong manly men, to drive them around.

The only ones who gain by the insurance gender equalisation are the insurance companies, god love them.

You got it wrong. What I am saying here is that women, for a number of socio-cultural reasons, are much more likely than men to just give up driving, selling their car and taking the bus or a taxi when possible, rather than take a huge insurance price hike. You can say they have more sense on this matter because it is true: most women consider a car as a mean of transportation, treat it as such and will be willing to put as little money as reasonably possible into it; most men consider it a "must have" and will be more than willing to shed some cash towards it, even when they have absolutely no need for one. The same concept, reversed, applies to expensive shoes and designer clothes - to most women are a must have, to most men are a "nice to have if I can afford them".

So, concept is, women tend to have an healthier attitude towards cars. If they can afford one and need it, they will have one; If they cannot afford one or don't really have a necessity, they'll ditch it, as opposed to men that will cling to their cars for dear life and cough up the cash. And before anybody comes up with "you're generalizing", well, insurances generalize in the first place: "all women are safe drivers, all men are dangerous ones".

The big fault in most people's line of thinking is that the lower prices are some sort of "reward" to women for the lower risk factor; It's not, it's a business strategy geared towards raking up as much cash as possible by luring in a somewhat more difficult to acquire "low maintenance" customer base, while offloading the financial cost on those who will pay even at a higher price.

Therefore, I am not sure about that insurances will simply bring women's prices up to par with men's; If it was a viable option for the companies, they would have done it already - high income and low claims expenditure, hardly a bad thing.

To be entirely honest, I have a feeling they'll come up with some new "risk factor" to consider that will keep prices exactly as they are.

tritium

Colonel Sanders wrote: »

What if its zero correlated with every other factor?

Edited to add I'm not playing devils advocate here, I've found gender to be VERY lowly correlated with factors when looking at GLMs

It's a fair point. Generally, as you'll be aware, you want low correlations between variables in a model. The most appropriate way around the issue you raise is to have a sufficiently large pool of candidate factors for the model to ensure some are correlated with gender. Of course this is often easier for cases like credit decisioning ( often a few hundred initial candidate variables) than insurance where the data may not be as rich

jackofalltrades

Zubeneschamali wrote: »

Yes, within the law. So, no discrimination on the basis of gender, race, religion etc.

The only area where it is illegal for them to discriminate is gender. Every other area is fair game as long as they can back it up with data.

Marcin_diy

I will never understand why women paid less for insurance than men.
I hold full DL for 10+ years and have 7years of NCB in my own name. I never had any claim, never even scratched my or any other car.
My wife passed theory test recently, she has never driven a car before, and simply can't drive yet, but once I got her insured under my insurance my premium went down 10 euro...

Can anyone explain it to me? Is there any logic in this that insurance companies find her a safer driver than me, while I have so many years of experience compared to her "qualifications" ?

Voodoomelon

Something that I always wondered about; are woman less likely to claim than men per capita, or are men penalised purely because there are many, many times more men driving on the roads and as such much more likely to claim?

challengemaster

Just spotted this in an email from Chill.ie (I'm not actually insured with them)

The EU Gender Directive
What will this mean for you?

As of December 21st 2012, a new EU ruling will see a change in the way that male and female insurance premiums are calculated. As in independant broker, we are in a great position to give you all the facts and information you need so you are fully prepared for these changes.

The ruling states that it is no longer fair to give women cheaper car and life insurance based on their sex. Horray I hear you all male readers cry, but before you all get too excited, its likely we will see men's premiums stay relatively static, and women's premiums increase to that in line of men's.

If you are mid policy, you will not see the change in price until your next renewal date, but if you are on the cusp of renewal or need an insurance quote, why not save yourself some time and call us on 1890 30 20 20 because we compare 14 different insurers to get you the best deal so you dont have to waste time searching lots of different insurers.