Car insurance? How big are your feet?
[Appeared in The Times, 25th February 2011]
If I weren’t such a mean dad, I would pay the £1500 to insure my 20-year old daughter to drive my car. If she magically swopped a chromosome and became a boy, it would cost me £2300. Next Tuesday it is likely that the EU Court of Justice will make it illegal to take gender into account when fixing insurance premiums, which means that my daughter would have to pay even more, and the chances of her ever driving my car will disappear entirely.
The EU Advocate General has stated that current practice appears to break EU discrimination laws. Is this reasonable? I would expect to pay more for my travel insurance if I chose to try and climb Everest rather than lie on the beach, but I don’t choose my gender and so why should it affect my premiums? On the other hand insurance only works by placing people into groups of broadly similar risk, and if low and high-risk groups get put in together, the premiums go up, low-risk people stop buying insurance and the system falls apart.
And there is sound statistical evidence that females and males have very different risk profiles. Boys are more accident–prone from a young age: sadly, around 210 children under 15 are killed in all types of accidents each year in England and Wales but the gender split even at this early age is not 50:50; around 130 are boys and around 80 are girls. These differences don’t stop when they get behind the wheel - males commit 90% of driving offences and insurers know that young males claim twice as much per policy as young females.
Women are also the safer bet at the other end of the age spectrum, with my life expectancy being 3 years less than a woman my age. But this time the male benefits from the difference, since I would pay less for a pension annuity as the insurers do not expect to have to pay me as long. This is likely to be outlawed as well. Of course men could get a discount if they started smoking, but even I am not sufficiently mean to do this.
This is a messy legal and ethical area, in which the insurers’ wish to set premiums on statistical grounds can lead to some odd consequences. Drivers who make no-fault claims, for example if someone runs into their parked car, get fed up when they are charged higher premiums in future. Insurers are not, in general, allowed to ask the results of genetic tests, but can ask for family history of diseases. They can’t ask about ethnicity but can ask postcode, which can mean much the same thing.
Maybe insurers will find a similar way round this problem – all they need to find are proxies that could tell them the gender of the applicant without actually asking. Maybe they could ask about preferences for handbags or hoodies? How many shoes you own? Or your shoe size?
The last measure has been seriously considered in a report commissioned by the Association of British Insurers, but they concluded it would probably be considered indirect discrimination. Unless, I suppose, they could prove that people with big feet are more likely to hit the wrong pedal, but even then there is probably some obscure EU law protecting persecuted large-footed minorities. They may get away with asking for height and weight if they could show that these directly increased risk, perhaps from not being able to see over the dashboard.
Even more efficient would be to ask for testosterone levels, since this might provide an even finer risk stratification than gender. If this is too intrusive then perhaps you might get asked for the lengths of your ring and index fingers, since the ratio of their lengths is associated with testosterone exposure in the womb. Males tend to have longer ring than index fingers, and a bigger difference in their lengths has been related to many classic ‘male’ behaviours, such as aggressive financial trading and increased convictions for traffic offences.
If this bonkers judgement goes through, then what next? Men my age can, rarely, get breast cancer, so am I being discriminated against by not being screened (even though it would be a complete waste of time and money)? Perhaps age-discrimination legislation will mean the EU will ban asking how old you are when setting insurance premiums, and then we might be asked for age-related proxies, such as whether we let out a loud sigh when settling in an armchair, or enjoy watching the Two Ronnies.
So when in future you have a daughter with a long ring finger and big feet, apart from heeding the traditional advice not to put her on the stage, you could also save on driving lessons since you won’t be able to afford the insurance anyway.