Any type of discrimination is wrong. Whether it is racism, ageism, sexism (just ask the guys at Sky Sports) or any other “ism”, it has no place in modern society.
However, many in our industry are not applauding calls from the EU Court of Justice to end gender discrimination by insurers, and backing their plans to force providers to cease using a person’s gender as a rating factor for insurance products.
A final decision from the EU is expected in the next month or two and if, as is highly possible, the outcome is to remove the opt-out clause which allows insurers to price products based in part on a gender, male and female customers can expect the same premiums for all types of cover.
A good thing all round? Well, it depends. Broadly speaking, women get cheaper premiums than men for products such as life cover and so insurers would need to make a decision; should they charge everyone the cheaper premium and take on a much greater risk for male lives, or should they charge everyone the higher premium to ensure they are not left exposed?
Similar dilemmas would occur in the world of annuities (where men traditionally enjoy higher payments) and in the pricing of many other protection and general insurance policies.
The point has been spectacularly missed: this is not discrimination, it is differentiation. Perhaps an example would help.
If a car insurer made the decision to charge women higher premiums, based on its perception that women are worse drivers than men, it would be discrimination. If a car insurer used statistical data to determine that, based on known facts and past experience, female drivers were on the whole a lower risk than their male counterparts and therefore chose to offer them lower premiums, it would be differentiation and perfectly logical and acceptable.
Actuaries use gender as part of a wide range of other factors when determining a potential risk. Their methods and process can be demonstrated and justified in precisely the same way that we can show why a person’s occupation, age, family history, lifestyle and health are relevant differentiators.
We must hope that common sense prevails and that insurers are permitted to continue using gender as a risk factor, the alternative is likely to be the worst of both worlds.
Finally, and for the record, no-one, male or female, fully understands the offside rule. At least not since it was changed by a bureaucratic, meddling governing body.