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FCA to launch probe into alleged insurance discrimination

FCA to launch probe into alleged insurance discrimination | Insurance Business

FCA to launch probe into alleged insurance discrimination

Unless you’ve been living under a rock for the last few days you can’t have missed a series of stories surrounding investigations into the way insurers calculate premiums. Both The Sun newspaper and BBC’s You and Yours radio show have conducted their own research, pointing fingers at insurers for charging more to those with names like Mohammad, rather than more traditional English names.

Now, the matter has caught the eye of the City watchdog.

According to a This Is Money report, the Financial Conduct Authority (FCA) is set to extend its consumer data research to examine whether names can impact the cost of car insurance cover.

Of course we all know that insurance firms use deeply complex algorithms when taking into account the huge amount of data they need to assess how much to charge their customers. However, concerns have been raised that the computer programmes employed are often singling out people with certain names as posing a higher risk – the investigations both suggested that ethnic minorities are discriminated against as simply changing the name on a quote search (and leaving all other details unchanged) can lead to a hike in the price offered.

Insurers, for their part, deny using race to set premiums.

What do you make of the investigation? Leave a comment below with your thoughts.
 

Related stories:
New probe suggests racism in motor insurance
Insurance industry slammed for discriminatory pricing
2 Comments
  • Andrew Wilkinson 2018-02-14 10:04:14 AM
    Working in the protection insurance space we have no knowledge about car insurance. However we have been pressing for better access to insurance for some time in the protection insurance space and we are starting to see some progress which is encouraging. However I am pleased and proud to say that we have seen no evidence whatsoever that customers in the protection insurance space are discriminated against on the basis of their colour or name.
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  • Tobias S 2018-05-05 12:37:33 PM
    In my organistion almost all of the BME staff have noted that when they apply for car insurance under "traditional/white" names their policies are far lower then when they apply under their own names. I tested this out on a leading compariosn website myself and the results were oncredibly different, up to 1/3 more expensive if I used exactly the same details and a BMW name. This needs to be stopped immediately and insurance companies should not be allowed to hide behind the "algorithms" and "other unknown factors" as reasons for ripping off thousands/potentially millions of BME people. It's outrageous and ridiculous that pathetic prejudice based on names is allowed to continue.
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