Monday, 7 March 2011

Further Thoughts on Insurance Discrimination.

When the European Court of Justice recently announced that insurance companies would be barred from charging the sexes differently for car insurance there was a wave of indignation. How dare they interfere? The insurance company actuaries have solid evidence that young men are more likely to have an accident! It defies common sense!

I have to admit it was easy to get caught up in that attitude, and this post is no excuse for the ECJ’s unwanted and unwarranted interference in the UK. But on further consideration I’m beginning to think they might have a significant and valid point in their judgement. 

When I started driving, even back 40 years ago, I suffered as a young male driver from sky high insurance premiums. But I wasn’t stupid or careless and fortunately never had an accident. When my son learned to drive some 30 years later the insurance premiums were astronomic, although he too was a sensible careful driver and also avoided having any accidents.  

Certainly young and inexperienced drivers are less able to interpret other people’s road behaviour and have less car control skill. Relatively more young male drivers have accidents than young women drivers, there is plenty of evidence for that, but I got to wondering why. It seems to me there are two explanations. 

The accepted one is that all young men are less careful and risk takers.  In that case, according to the insurance industry, all young male drivers should be penalised on the basis of gender. But on reflection I don’t think it’s that simple. Not all men are the same and not all young men are thoughtless and careless risk takers.

Isn’t it more likely that there exists a class of young drivers, and we can recognise some by the blinged up cheap cars and baseball caps of the drivers, who are careless, thoughtless, drive too fast and take risks. Just because most (but not all) members of that sub-group are male does it justify penalising all males?  Personally I don’t think it does. Why should a sensible careful young male driver be penalised because some other sub-group of males with different social values and different personalities are careless? 

I think the insurance industry have been using gross oversimplified gender profiling because it’s easier for them and they can pretend it targets risk. Maybe it’s not a bad thing if they are forced to stop demonising half the population and develop a system that actually targets the people most at risk, rather than being allowed to penalise Peter for the failings of Paul simply because they have the same gender.

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