If your male clients are griping that they pay more than their female counterparts, you can tell them that they are doing much better in the P&C space than in life insurance.
Recent numbers from theredpin.com show that on average, women pay 5 per cent less than men for auto coverage and 8 per cent less for home insurance.
Although it may stick in a few male craws, the numbers are better than the life insurance sector, when women pay an average of 25 per cent less.
One solution to perceived gender bias may be through individualized rating for home and auto, which Saskatchewan’s government insurer began more than a year ago.
“Individualized rating is looking at doing analytics on our data to find different rating variables or combinations of variables that are predictive of loss and that we have never seen before,” Don Thompson, vice president of program management told
Insurance Business. “We view this as helping the broker channel survive against direct writers. It’s a better, customer-focused way of rating in our minds. It better matches risk with the price of insurance. If we can’t match the sophistication of rating that direct writers have, we are going to lose business to those markets.”
SGI began using more sophisticated analytics to obtain more individualized rating of risks for at least a year, in conjunction with its broker network.
Private insurers such as
Intact, Economical and many others distributing through the broker channel have already transitioned to the use of data analytics.
According to the redpin.com, the difference in home insurance premiums is mostly driven by home value and a number of other factors not directly affected by gender. (continued.)
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In auto, the analytics tend to back up the discrepancies between men and women, as women not only make fewer claims, but that the value of those claims is lower than men’s.
For Ontario, those differences translate in to $5 a month and an approximate 3 per cent in premium.
The disparity in life insurance premium can be attributed to the longer lifespans of women (83 years) compared to 79 for men, according to Statistics Canada. As such, women are viewed as a lower-risk customer segment than men.
The redpin.com analysis of insurance premiums of Canadians was conducted in four of the most populated provinces: Ontario, Quebec, British Columbia and Alberta by InsurEye Inc., an independent online platform for consumer insurance reviews and comparisons.
The cost of insurance made national headlines when a new study conducted by two York University professors for the Ontario Trial Lawyers Association showed that the average Ontario family should have paid $100 to $120 less for auto insurance in 2013, adding up to a total of $840 million in overcharges that year. See ‘
Ontario drivers overcharged $3 billion on insurance: Study’
“Families in the province are paying more and getting less,” said Steve Rastin, president of the Ontario Trial Lawyers Association.
