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Insurance No Longer To Be Based On Risk

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If insurers can't properly assess risk then perhaps premiums will have to be increased right across the board in order to compensate.

This judgement is really going to shake things up.

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So now they will have to assess risk based upon age not sex. 17 yr olds as a cohort not differentiated.

There, that wasn't so hard now was it?

Yes it will be.

Females will be forced to pay for the risk of males, males..... won't get insurance because insurers won't enter loss making contracts.

Insurers will devise new products which get around it all because customers will demand it.

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It should be an open market and up to them how they assess risk.

Could say that about everything. Publicans should be free to refuse to serve black men - they can always choose to drink somewhere else. Male bosses should be free to make sexist comments about female employees - they can always choose to work somewhere else. B&B owners should be free to refuse accommodation to gay couples - they can always choose to stay somewhere else.

Or maybe a civilised society should make it a general principle that you cannot hold an accident of birth against somebody and (when necessary) enforce rules to that effect.

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Could say that about everything. Publicans should be free to refuse to serve black men - they can always choose to drink somewhere else. Male bosses should be free to make sexist comments about female employees - they can always choose to work somewhere else. B&B owners should be free to refuse accommodation to gay couples - they can always choose to stay somewhere else.

Or maybe a civilised society should make it a general principle that you cannot hold an accident of birth against somebody and (when necessary) enforce rules to that effect.

Yes, they all should be free like that.

And people should be free to boycott suppliers they dislike.

Then the solution will truly reflect what people want, not what somone else thinks they should like. See how long bosses stay in jobs when they have no employees, publicans when they have no customers, B&B owners ditto.

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Then they wouldn't matter.

Gender does though, which is why this ruling is insane and will hurt customers.

The pool of drivers remains the same, and the total "insurance take" remains the same.

The ruling will only hurt costomers who previously benefitted from the differentiation.

It will help customers who were discriminated against.

Overall, the cost to customers will be: Zero.

It's just about gender equality. according to law, you are not allowed to discriminate with regardst o somebodies sex when considering them for, saty, a job - even if you think that women are better than men at a particular job.

Given that we have gender antidiscrimination laws, the judgement is perfectly reasonable.

It's just levellling the playing field a little.

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Then they wouldn't matter.

Gender does though, which is why this ruling is insane and will hurt customers.

Well, I'll give you 2 people, one male and one female, and I want you to give me a risk assessment, based only on their gender. No other information.

And the issue here is discounting based solely on one criteria, that of gender.

But risk assessments will continue. The cost of making a risk assessment may increase.

I suspect it's harder / more costly to determine an accurate risk assessment for some groups, and I think it's possible that insurance companies have removed themselves from markets were it's hard or expensive to make a risk assessment.

Besides I thought that a lot of car insurance was sold at a loss to facilitate the sale of more profitable insurance products. I'd love to see the profitability on uptake of secondary polices / value added products etc…

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The pool of drivers remains the same, and the total "insurance take" remains the same.

The ruling will only hurt costomers who previously benefitted from the differentiation.

It will help customers who were discriminated against.

Overall, the cost to customers will be: Zero.

It's just about gender equality. according to law, you are not allowed to discriminate with regardst o somebodies sex when considering them for, saty, a job - even if you think that women are better than men at a particular job.

Given that we have gender antidiscrimination laws, the judgement is perfectly reasonable.

It's just levellling the playing field a little.

Great, so you're in favour of everyone being paid the same regardless of output?

Just quoting the stupid law to me takes the debate nowhere; we kknow insane statists engaged in their social engineering fantasies can f*ck anything up.

There is no "playing field", there is people trying to hedge their risk. THEIR risk.

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Well, I'll give you 2 people, one male and one female, and I want you to give me a risk assessment, based only on their gender. No other information.

No probs. Look at the data and go with that.

The alternative is to ignore facts, which strikes me as a bit stupid, but not unexpected.

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Yes, they all should be free like that.

And people should be free to boycott suppliers they dislike.

Then the solution will truly reflect what people want, not what somone else thinks they should like. See how long bosses stay in jobs when they have no employees, publicans when they have no customers, B&B owners ditto.

+1

Prejudiced people have a smaller customer base and will soon be bought out by the non prejudiced.

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Great, so you're in favour of everyone being paid the same regardless of output?

Just quoting the stupid law to me takes the debate nowhere; we kknow insane statists engaged in their social engineering fantasies can f*ck anything up.

There is no "playing field", there is people trying to hedge their risk. THEIR risk.

Nevertheless, the law, whether you consider it stupid or not, is the law.

Given that law, this judgement is perfectly reasonable.

The insurance companies RISK does not change - they are still insuring the same people, and for the same (total) amount of money. There is NO CHANGE as far as the insurers are concerned, apart from who is giving them their money.

The bigger question, however, is that of whether anti-discriminatory laws are sensible and / or right. I think I know your thoughts on this.

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Nevertheless, the law, whether you consider it stupid or not, is the law.

Given that law, this judgement is perfectly reasonable.

The insurance companies RISK does not change - they are still insuring the same people, and for the same (total) amount of money. There is NO CHANGE as far as the insurers are concerned, apart from who is giving them their money.

The bigger question, however, is that of whether anti-discriminatory laws are sensible and / or right. I think I know your thoughts on this.

There will be change all right.

Price differentiation is crucial to efficiently supplying a market. F*ck around with that and what happens is not that everyone gets averaged, but that suppliers shift to only supporting the profitable sector. That's why bus services in rural areas are no more.

Thing is that rule makes always make the same stupid error of thinking they are in charge. They aren't, the only thing they do is change the environment and smart people respond to find the value in the new environment. Unfortunately, because rule makers can't find value themselves they have no conception of the results their actions will lead to. Usually they respond by...... you guessed it...... making some more rules.

And so it goes.

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What, instead of being blue eyes as the signal, it was a race related trait?

Blue eyes are strongly race-related!

Your point is perfectly valid. What it tells us is that we have an imperfect market. There should be a great opportunity for an insurer to assess risk better and beat the existing players in the marketplace. But it doesn't justify meddling: either we have a market or we don't, and a crippled market looks like the worst of both worlds.

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I agree that there is a bit of an issue in that something compulsary is provided entirely by the private sector. Perhaps someone one day will come up with a better model that could provide people with a very basic level of 3rd party driver cover that is not linked to a car.

They do this in OZ,NZ and Canada. You register the vehicle and basic 3rd party Insurance covers you from that point.

Cant remember the first 2 but in Canada where you lived was the only thing used to work out how much this registration cost you. And every vehicle has to be registered - so everyone has by default 3rd party insurance. Your number plate also moves with you rather than the car itself. Cant remember how exactly this fits in with the insurance though.

Seems to work just fine anyway.

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Yes, they all should be free like that.

And people should be free to boycott suppliers they dislike.

Then the solution will truly reflect what people want, not what somone else thinks they should like. See how long bosses stay in jobs when they have no employees, publicans when they have no customers, B&B owners ditto.

Are market forces your solution to absolutely everything? Should we deal with violent crime using market forces? Everybody could pay a private insurance company a premium so that if they were violently attacked, the insurance company would send some thugs round to the offender's house to deliver a beating. What's the market-based solution to child pornography? Or air pollution? Or neighbours playing loud music all night?

I don't think it's wrong for governments to come up with some ground rules that govern what is reasonable behaviour in a civilised society, as long as those rules are not too onerous. Saying that you cannot treat people differently because of their gender, ethnicity or sexual orientation seems like a good principle to me.

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You mean there aren't riots?

None that I saw. Just remember - you also had to do some safety/emmision test as part of the registration. So all of that sort of basic stuff seems to be rolled up into one thing each driver of each car gets. Ownership/Safety (MOT)/ Insurance.

Oh and my insurance covered me 3rd party to drive into the US for trips here and there. And I wasn't a Canadian citizen. But I was covered for all the legal p1sh in the US for however many million.

And no - there were still no riots.

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No probs. Look at the data and go with that.

The alternative is to ignore facts, which strikes me as a bit stupid, but not unexpected.

Sure and based on that information, you'd charge them the same. As there isn't enough information to differentiate.

I worked on some risk assessment software, nearly 15 years ago now, and it moved on so much since then. This was auto motive finance pre securitisation, so sure not insurance.

But gender, alone, isn’t sufficient information for a risk assement.

Discounting to Woman, based solely on gender, isn’t a risk based approach.

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The pool of drivers remains the same, and the total "insurance take" remains the same.

The ruling will only hurt costomers who previously benefitted from the differentiation.

It will help customers who were discriminated against.

Overall, the cost to customers will be: Zero.

It's just about gender equality. according to law, you are not allowed to discriminate with regardst o somebodies sex when considering them for, saty, a job - even if you think that women are better than men at a particular job.

Given that we have gender antidiscrimination laws, the judgement is perfectly reasonable.

It's just levellling the playing field a little.

you are completely wrong here , this is what the busybodys think they will achieve but what they will really achieve is higher pricing for everyone until the insurers can get the system back to how it was before using different proxies, occupation - housewife - cheap insurance , occupation - builer expensive , occupation nurse - cheap , cant really tell , expensive ...

The whole point of trying to accurately predict what someones risk profile is from factors such as age , sex , area is the thing that makes it work , people pay a fair premium for the risk they represent, and it keeps the 17 year old nutters out of high powered cars very well as a by product . A man about to buy an annuity will be well advised to try buy it from some place outside the EU where such nonsense is not enforced, I am sure the huge insurers in Switzerland for example will be laughing at their good fortune ...

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+1

Prejudiced people have a smaller customer base and will soon be bought out by the non prejudiced.

Really?

There’s Sheila’s Wheels, and companies like Saga catering for the over 55s still up and running. Where’s the alternative for the under 25s?

There isn't any, which kind of suggests the market is 100% prejudiced.

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The whole point of trying to accurately predict what someones risk profile is from factors such as age , sex , area is the thing that makes it work , people pay a fair premium for the risk they represent, and it keeps the 17 year old nutters out of high powered cars very well as a by product .

In Portugal you pay a premium based on your car alone, not the driver. Anybody can drive any car. Portuguese people are always astonished when I tell them that in the UK there is a list of people who are insured to drive each individual car, and the vast majority of people would not be allowed to drive their friend's car round to the shops.

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Are market forces your solution to absolutely everything? Should we deal with violent crime using market forces? Everybody could pay a private insurance company a premium so that if they were violently attacked, the insurance company would send some thugs round to the offender's house to deliver a beating. What's the market-based solution to child pornography? Or air pollution? Or neighbours playing loud music all night?

Violence isn't the answer to stopping violence. If it was there wouldn't be any by now.

I suppose you think the current solutions to child pornography are working just fine?

I don't think it's wrong for governments to come up with some ground rules that govern what is reasonable behaviour in a civilised society, as long as those rules are not too onerous. Saying that you cannot treat people differently because of their gender, ethnicity or sexual orientation seems like a good principle to me.

This is so loaded with your personal values that it's meaningless as an objective tool. You may as well make yourself Fuhrer and get on with it.

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Really?

There’s Sheila’s Wheels, and companies like Saga catering for the over 55s still up and running. Where’s the alternative for the under 25s?

There isn't any, which kind of suggests the market is 100% prejudiced.

Club 18-30?

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Violence isn't the answer to stopping violence. If it was there wouldn't be any by now.

I suppose you think the current solutions to child pornography are working just fine?

This is so loaded with your personal values that it's meaningless as an objective tool. You may as well make yourself Fuhrer and get on with it.

I Invoke Godwins rule.

But seriously,

(1) you are perhaps a little extreme comparing somebody who wants some society ground rules to hitler

(2) whether the current system works well, or not, you did not say what your 'solution' to them should be. Lynch mobs, presumeably?

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This is so loaded with your personal values that it's meaningless as an objective tool. You may as well make yourself Fuhrer and get on with it.

Saying that I don't mind democratic governments coming up with a few rules that govern civilised behaviour is no more subjective than saying that everything should be operated by market forces. You have no special claim to objectivity either.

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