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Sex Discrimination in Insurance Rates
A legal advisor to the European Court of Justice has advised that it is illegal to charge different premiums to women and men for life insurance and car insurance, merely because women live longer and have fewer accidents.
The differences are not inherent in women and men, and therefore are discriminatory.
This advice is not binding on anyone, but the ECJ usually goes along with its advisors.
Does this make sense to you? or is it just too politically correct for words?
To take it a step further: should it not also be illegal to apply differing premiums to new drivers, based on their age? Young people, specifically males between 16-25, are involved in a significant number of collisions, enough for actuaries to charge this demographic more. However, can we say that this is inherent for their age/gender? Shouldn’t insurance, specifically car insurance, assume every driver equal at the outset, and adjust premiums according to driving history (e.g., tickets, demerits, etc)?
Premiums are also adjusted based on your profession and education level attained. I don’t agree with the use of any of it, unless it were to determine the credit risk of the individual.
Furthermore, as an actuary, would you not want even more data to determine risk? You could do everything: ethnicity, sexuality, consumer spending, etc. to see if you could find any correlation. I’m just musing, but I’ve always loathed how insurance companies can explicitly discriminate against someones gender, age, education and profession.