Conflicting thoughts

Back when I were a lad, in the dark days of the pre-millennium, I was a new driver. Being a young lad, in Norn Iron, and only having had a licence for fifteen minutes, insurance was an absolute bitch. And to complement that, I bitched about the unfairness of it all, and the blatant discrimination against men that was the difference in insurance premiums between male and female.

Yes, I was a simple soul back then. What of it?

After not too many years, though, I saw the wisdom of it. Myself and many of my male friends and acquaintances did serious damage to cars, while few females did. Our accidents were more frequent and more serious, so it became clear to me why insurance premiums might be so different. It’s all about playing the odds. There is less of a risk insuring women, and therefore it’s obvious that women should pay less.

It’s with this thought that I am pretty solidly against yesterday’s European Court ruling.

Insurers cannot charge different premiums to men and women because of their gender, the European Court of Justice (ECJ) has ruled.

The decision means that women can no longer be charged lower car insurance premiums than men, and the cost of buying a pensions annuity will change.

This is, on the face of it, lunacy. If the costs of insuring men are so much higher to the company, should they not be to the customer as well? Why should women subsidise men on this? Sheer, bureaucratic, EU nonsense.

There is more to it, of course. I’m sure that there are certain ethnic groups that are more risky to insure than others; should ethnicity be taken into account? Disabled passengers cost more on flights and ferries, should this cost be borne by the customer alone or factored into everyone’s ticket prices?

Clearly, it’s never going to be as simple as “there shall be no discrimination” or “all discrimination is to be allowed”. In insurance there’s clearly a need to discriminate in some ways, otherwise there’d only ever be a flat fee for someone to be insured and it wouldn’t do anything to reward good drivers while penalising poor drivers. But what is an acceptable discrimination; I say gender, occupation, relationship status and all that are fine, whereas ethnicity probably isn’t.

What say you? Where would others draw the line?

Obviously, it goes without saying that this is also a mass over-reaching of the state into private business and the like, but that ship has sailed…

2 thoughts on “Conflicting thoughts

  1. Leaving aside for the moment the wider questions, the judges’ hands were pretty much tied here, as this issue was explicitly written into the original directive: “The use of actuarial factors related to sex is widespread in the provision of insurance and other related financial services. In order to ensure equal treatment between men and women, the use of sex as an actuarial factor should not result in differences in individuals’ premiums and benefits.”

    It may very well be a bad law (and on that I’m as yet undecided), but this isn’t judges running amok, as much of the furore around this seems to imply.

    On the issue itself, I’m undecided. It seems to me that there must be a reason why some/most young male drivers are more risky, so if the insurance company could accurately set premiums based on that reason, rather than a simple male/female split, they’d not only be in line with the current law, but would also be doing their job better.

  2. Tim Worstall, I think, also pointed out that there are laws against ageism. Which sort of suggests that I should be able to buy an annuity for the same price as an 80 year old. I want some of -that- action!

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>