Bonkers

Hopefully there will be a ruling stating that insurance companies can't discriminate against where the policyholder lives and what kind of car the policyholder insures!

I mean why should my girlfriend's 1.2 Nissan cost less than my 4.0, V8 Range Rover anyway? Why should I be discriminated against keeping my car on the road in the city centre as opposed to being safely locked in a garage in a nice suburb?

Maybe they shouldn't discriminate against drivers who have previously lost their driving license due to speeding or drink driving either.

The EU makes it difficult for even Europhiles to defend it sometimes.

The question is if it should be allowed to differentiate on any statistically significant variation. In that case race, religion and ethnicity might come into play. Many countries seem to handle this by outlawing certain kinds of differentiation, actually usually the three just mentioned: race, religion and ethnicity. And there are usually two more: Gender and sexual orientation that are deemed out of bounds.

If you believe that there should be no differentiation (actually discrimination from an individual's point of view) based upon these groupings, then you cannot differentiate on gender when it comes to car insurances.

Some years ago The Economist carried an article on the statistically quite significant inferiority of short men. It is all a bit of a tricky problem: "Are you a short muslim man-boy? then you get this rate. A homosexual female tall sephardic menopausal jew? Then this is the rate for you".

Most people, including judges it seems, cannot tell the difference between insurance and social security. There are other egregious examples - for instance all householders in the UK, even those for whom the flood risk is essentially zero, pay similar rates for flood insurance. This supports those for whom flooding is a major problem. Well intentioned perhaps (it reduces taxpayer support anyway), but it has tended to encourage the building of houses in flood plains where the risk is greater.... And insurers are then liable to react by denying cover altogether.

But you might note a recent medical study that finds that most of the observed difference in longevity between men and women is explained by alcohol and tobacco, with much of the rest being 'other environmental factors'. So it may be about to disappear anyway!

While I'm not wild about the ruling, bonkers is going too far. It sounds as if the differentiation against women is lazy. Such statistical associations are often used to support prejudice in all sorts of fields, as other contributors have pointed out. The question is, why do women have less accidents - and is there another way of discriminating that targets dangerous behaviour more precisely?

Behind this, though, is the menace of adverse selection. If women walk away from over-priced contracts, then you have a problem. As somebody pointed out on the radio this morning, less of a problem with car insurance, which is compulsory, than annuities. Insurance companies will have to sharpen up.

It is the way that insurance premiums are calculated that is bonkers buttonwood. Take any field of endeavour, pick a means of division (sex, age, likes eastenders) and one group will be more prone to something, and the other less prone. Within the group of young males there are undoubtedly safe, cautious drivers. Conversely there are aggressive unsafe female drivers. I should be charged a insurance rate based on my propensity to be involved in a crash. The only way to do this objectively is to test me and measure my record, not try to place me within a group! This is exactly how people people get a credit rating: they start off with an assumed poor rating and earn credit over time by behaving 'well'. The fair way to price car insurance is to start off with everyone treated as a dangerous driver, paying a high premium (by the month or quarter say) and earning their reputation (by building up a history of no-involvement in crashes, and undergoing period one-on-one reviews). You can best tell a safe driver from a reckless one by sitting in the car with him,even if he is trying to act safe.

What an enlightened decision.

Lets hope that we can push through an age descrimination one as well.

Why should 25 year olds have cheaper life insurance than 95 year olds.
Why should an annuity for a 25 year old cost more than one for a 60 year old.

After we have done this we need to make it illegal for a cave diving latex intolerant heroin adicted nymphomaniac gay dentist to be charged more for life insurance than a carmelite nun.

Is there no way this can be overturned?

Strange, the way that unisex insurance clings to the palaeofeminist dogma that men and women are exactly the same, and thereby guaranteeing gender unfairness and inequality.

@rexado_78

The whole point of insurance is that people who don't claim pay for people who do. Insurance only works if it is done on a group basis.

The law treats sex discrimination as something approaching an absolute bad, as it does discrimination on race say. Due to the manifest and profound differences between men and women though, our actual policy takes a more nuanced approach, following something of a separate-but-equal path, modulated by the media and public opinion. The courts appear to be slowly unpicking our wilful - and often beneficial - blindness.

Or, more fatuously:
Will women's sport go the same way as competitions for whites alone? Will retirement be found to breach age-equality principles?

A price of allowing nosy "liberals" to start abusing state power to interfere with private contracs.

@rexado_78

I take it to mean - you'd be in favor of state "inspectors" regularly sitting in the cars to test and measure your record. It has to be the state - one can't trust corporations to collect and keep information like that. Or more effective and cheaper still - CCTV camera and a telemetry system in/on every motor vehicle. Gave a dirty look to that other car's driver? Premium's up! Imagine the possibilities!

But why stop at vehicle insurance? Surely there has to be some premiums (health, life insurace?) that could be made dependant on how and with whom are you getting it on? :)

I am really not given to ranting about Europe, but Equality does not mean that everyone is the same. This ludricrous interpretation of the law. I have never met a sane person who thought it unfair that women pay less than men for car insurance or that men have cheaper annuities. These outcomes are part of our natural environment - testorene appears to encourages risky behaviour, possibly accounts for an earlier death.

If they want to focus on Equality between men and women, then why not look at unexplained amounts by which women are paid less than men.

@Corporateanmarchist wrote 'cave diving latex intolerant heroin adicted nymphomaniac gay dentist' - HAHAHAHA Too funny!

And Europe wonders why the British have issues with laws trickling down from Bruxelles?

What a daft decision.

How typical to implement legislation that defies economic statistics and reverses and gravity.

Let's now pass one that says, "all people are equally intelligent, good looking, the same size, etc.(And live the same lifespan)"

Of course this wouldn't apply the those who thought this idiocy up, since their brains are obviously smaller.

Mad.

Zambino,

"I have never met a sane person who thought it unfair that women pay less than men for car insurance"

Perhaps we should meet. I'm male, reasonably sane and I think it's unfair that I have to pay more for car insurance. One of the first things I learned about statistics is that correlation is not causation. Correlation is certainly not causation on an individual level. Perhaps young males as a group have more car accidents etc., but there's no solid reason to assume that I, as an individual, am therefore more accident-prone than women.

Zambino..

Corporateanarchist, I think, moves in some unusual circles...:)

@exscientist - it should say YOUNG men and women - as once you have been driving for a few years and have proved yourself different from the pack (that an the average man calms down), your premiums fall. My wife and I, both in our early thirties with all the no-claims discount you can get have virtually identical insurance premiums.

And what about annuities, which is really important - are you saying that women don't live longer than men? Or that the market shouldn't price this in? In the absense of perfect information in deciding price for insurance premiums one has to make assumptions and using gender is clearly going to form part of this judgement. This is not the same discrimination against the individual.

The article and many of the comments are missing the point. Buttonwood talks of "young female drivers who tend to have fewer accidents than their boy racer counterparts". Not all young men are "boy racers", and not all young female drivers "tend to have fewer accidents". People are individuals. I, for one, have never had an accident or a traffic ticket, but am still charged higher insurance rates. This may make sense for an insurer who wants to maximise takings while avoiding the cost of individually assessing drivers, but it makes little sense from the point of view of an individual.

The point is that gender, like race, is something that is completely outside the individual's control, whereas driving ability is. The two are not necessarily linked, they are accidentally linked by the presence of more irresponsible individuals in one category (men) than in another (women). This makes the car-insurance situation different from the annuity situation in that an individual cannot "control" his life expectancy to any meaningful degree. Equating the two is misleading and intellectually sloppy.

I would expect better-quality thinking from Buttonwood.

Zambino, as long as the link between being male and being accident-prone is merely statistical, as long as there is no solidly established causal link between the fact that I'm male and my individual qualities as a driver, it's unfair that I should pay more for car insurance than women of the same age.

Actuarial student here. I'm going to make a jumble of not particularly related points.

One: motor insurance pricing in the UK is, by and large, not profitable (really). High levels of claim inflation and (whisper it) fraud on the cost side and intense pressure from the aggregators (Go Compare et al) on premiums mean there is little left.

I've only skimmed the ruling, but as I understand it, what it actually forbids is the *direct* use of gender as a determinant. One might imagine a life insurance mortality model which assessed various pieces of medical data about an individual, including gender, and spat out a fair premium for that individual. It may well be such a process is permissible.

As far as general insurance goes, particularly motor insurance, I think it is a good thing. Premiums have been genuinely iniquitous for very large numbers of drivers - both the dangerous females and the safe males - for a long time. While it is true to say that on average, males are much more likely to claim than females, gender is just a proxy for the true causes of accidents. If insurers were to develop means of directly assessing driver risk it could only be a good thing.

Lastly: this isn't a human rights ruling, at least not directly. The backstory: an EU directive forbade differential treatment by gender. If member states already permitted such differential treatment before a certain date, they could enact an exemption, to be reviewed in five years. Since the intention was that states should not allow differential treatment, this exemption has been removed. This ruling could in principle be reversed if the Commission was to get its collective act together.

Well, as long as the EU is going to bar by insurance companies (to the detriment of women) the least it can do is give them something back by banning gender discrimination in prices for clothing.

I mean, why should a pair of jeans for women be priced so much higher than a pair for men? Or a woman's pants suit so much higher than a man's suit? It would seem to be an area where there is real discrimination without even any statistical justification.