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Insurance industry slammed for discriminatory pricing

Insurance industry slammed for discriminatory pricing | Insurance Business

Insurance industry slammed for discriminatory pricing

First it was The Sun, then the BBC… now it’s The Times’ turn to unveil the findings of its own investigation into alleged discriminatory pricing by insurance companies. And, no, it’s not the usual name/ethnicity test.  

According to The Times, home and car insurance premiums are being priced based on how wealthy, or poor for that matter, customers seem to providers – from the smallest of indications such as someone’s choice of internet browser when looking for policies online.

Here’s what the newspaper found, either through mystery shopping or industry insiders:

  • A prospective insured living in a flat will be charged as much as 10% more for motor insurance, even if the customer resides in the same area and drives the same car as a house-dweller.
  • Divorced men, stereotyped as having lost money to their ex-wives, are likely to pay 8% more for home contents insurance.
  • Those who use Safari when browsing are said to be favoured when it comes to prices, simply due to the assumption that they own an expensive Apple device.

The premise being: the more well-off a policyholder is, the less likely a claim will be made.

“Someone who is poor may claim the £50 above their excess it costs to repair a small dent to their bumper because that amount of money means a lot to them, but a richer customer might not think it worth the bother,” an insider told The Times.

In light of this, campaign group Fairer Finance has called for government action.   

“As a society we do not think it is reasonable to discriminate on the basis of sexuality, so why is it OK to charge more on the basis of the job you do or your income,” founder James Daley was quoted as saying. “The government must conduct a review of pricing that is completely independent of the industry, to decide what is fair.”

As insurance professionals, where do you stand on the issue? Is it fair to base premiums on someone’s perceived wealth? Leave a comment below with your thoughts.

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