A recent Canadian report* indicates alcohol-related vehicle crashes in Canada killed significantly more males than females. Almost 80% of fatalities in such collisions were male; and almost 70% of those were drivers (as opposed to passengers or pedestrians.)
Digging into the stats provides more support for the contention that while males generally may not represent a higher accident frequency, they do cause elevated accident severity – more damage, injuries and fatalities.
Demographic rating in its purist form allows underwriters to use whatever data is available to predict probable claims outcomes for populations grouped by gender, age, credit score, or whatever other metric is a reasonable predictor of risk.
Even so, Europe’s top court has banned insurance rating by gender. In a ruling earlier this month, the EU court mandated that all insurers must comply with gender-neutral rating by December 2012.
Hence the question: is it fair that the individual driver is rated according to gender? (In Ontario, only drivers under 25 years of age are rated by their sex.)
Around the world, it continues to be common for insurance rating (particularly vehicle and life insurance), to reflect historical trends so that higher risk groups are required to pay commensurate with the greater risk they represent.
But some argue that insurance rating should ignore historical trends of the group, as that is unfair to the individual. The EU decision appears to seek individual and sexual egalitarianism, over group actuarial indicators.
One more thing: in light of the EU ruling, it is estimated that car insurance premiums paid by women under the age of 25 in the UK could now rise by 25% to compensate for the decrease in premiums paid by young men.
Many consumers forget a simple axiom: the total amount of claims paid will be unchanged no matter how individual premiums are calculated. Insurers require the same pool of money to pay claims – regardless of how that pool is apportioned by gender.
*Traffic Injury Research Foundation: The Alcohol Crash Problem in Canada: 2008 (released March 2011)
Tags: Automobile, damage, driving, gender, insurance, ontario, premium, rating, risk
Comments
RSS Updates
Email Updates
Follow via Twitter
Become a Fan
Let's Connect
Watch Video Blogs
Check out photos
KM
March 21, 2011 at 9:19 am
I think rating should depend more on the individual’s driving habits than what gender they are. The majority of serious accidents may be caused by males but anyone can have a bad driving record. If you continuously speed, and cause serious accidents, then you should pay the price, regardless of gender.
sl
March 21, 2011 at 11:46 am
I feel that rating should not ignore historical trends of higher risk groups. Actuarial indicators have shown underage male operators are a higher risk therefore this group should contribute more twards the cost of claims. … seems unfair, but statistics are firm.
Stirling
March 22, 2011 at 8:58 am
In a truly free society the insurance companies should be able to set rates however they please. If that means segmenting by gender, age, race, country of origin, religion, type of vehicle, voting preference, credit rating, martial status, favourite colour or whatever, so be it.
Unfortunately we don’t live in a free society, so I see no reason why men should be picked on here, yet not benefit in other ways because discrimination is precluded.
Nope, everybody should pay the same insurance rates until their own record dictates otherwise. Shouldn’t be able to discriminate based on age, either.
gc
March 22, 2011 at 10:11 am
Rate according to the individuals driving record – not sex!
HC
March 24, 2011 at 8:10 am
Rating a person by gender seems alot like rating by race or another discriminatory factor.
LR
March 24, 2011 at 8:57 am
Rate accordingly by driving records not by sex. I think its discrimination that the males are rated higher when some female drivers are worse than some male divers.
HG
March 24, 2011 at 11:51 am
RATE DRIVERS BY THEIR DRIVING HABITS– ALLOW LARGER DISCOUNT FOR NUMBERS OF YEARS ACCIDENT FREE AND SURCHARGED THE POLICY FOR CONVICTIONS.
cd
March 28, 2011 at 4:41 pm
It stands to reason that insurance companies must rate individuals according to the historical trends, however allowing a greater discount for number of years accident free is a good idea that would allow insurers to offer good drivers a lower premium.