Tomorrow morning the European Court rules whether insurers break discrimination laws by pricing men and women differently. For me whether that’s right or wrong is a tough wrestle as there are two different factors at play – each sex’s differing bodies and behaviour.
If it brands this unfair, as the hot money suggests, HUGE price changes are likely – whether it will hit immediately or in three years no one knows. Currently insurers price using complex actuarial tables based on past claims to predict risks. But car insurance and level term life assurance costs may rise for women, and private medical insurance and annuity costs could rise for men.
Is it fair?
I really am split here, for me its depends on why there is a difference…
- Discrimination based on behaviour.With car insurance, the difference is due to behavioural trends, so why should one man be penalised because others males have dire driving records. Would we allow racial price differences if white men drove worse than black? Why should a well behaved male driver be penalised just because of how others of his gender operate.
- Discrimination based on biology. With life insurance women pay less as they live longer, that’s not bias, it’s biology. If we prevent insurers pricing on gender, why is it fair to incorporate age or even pre-existing medical conditions. This path ends with everyone paying the same, meaning the majority price rises to cover high risk minorities.
So having thought about this long and hard my view is we should be allowed to price discriminate if it’s on biology and medical fact, but not if its on behaviour. What do you think? Vote in the MSE poll and have your say in the discussion below.