Which Gender Should Pay More?

Recently, my attention has been caught by a rather interesting debate that seems to have come out of nowhere (possibly hidden in the deluge of media coverage of the various Middle Eastern uprisings). After it emerged that the EU’s European Court of Justice (ECJ) had ruled against the legality of insurance companies to discriminate on the basis of gender, a veritable flotilla of articles about this issue seems to have been launched.

So here I am, jumping on the bandwagon. It is a fascinating issue: I don’t know about you, but I was certainly very conflicted about my views on it.

At first glance, the ruling seems like a welcome thing. Forget about hitting the ‘Go Compare’ man around the head with a bat: no more of those ‘Sheila’s Wheels’ women? …Great!

But annoying tunes aside and more seriously, I have always thought there was something very sexist about the lyrics in their jingle. ‘Women make for better drivers/You can save a bunch of fivers!’? I’ve always wondered what men think about this, but it gives me a deep sense of unease. This feeling increased even further when a recent BBC article described two twins, with the exact same driving record, paying different amounts for their car insurance on the basis of their gender. By banning this, the ECJ seems to have taken a very valuable step towards greater equality.

However, when I took a second glance – persuaded greatly by most of the article flotilla, who are largely on the attack – the complete opposite impression seems to jump out.

The argument is all to do with risk: at the end of the day, the fact remains that women do have fewer accidents on the whole, especially younger women compared to younger men. Common sense seems to dictate that because they are a lower risk to insurers, they should pay less money than men – forcing them to pay more whilst lowering men’s rates is just unfair because it isn’t their fault. At this stage of looking at the situation, it seems to be completely nonsensical and driven purely by an autonomous, idealistic effort to Promote Equality. ‘It’s PC gone mad!’ people have cried. Now for some reason, I become deeply cynical about the weight of an argument when people end up resorting to this statement.  I immediately took a third look at the issue.

At first, the concept of lower risk women having to subsidise higher risk men may seem unfair. But if you think about it, the men who drive well are subsidising the ones who are having the accidents as they are the ones raising the average risk for the whole group. They have to pay higher amounts because people who happen to be the same gender as them– the much cited ‘young studs’ with fast cars-are having accidents. It would surely be fairer to spread the cost around to women as well.

Considering this, discrimination doesn’t seem to be necessary. I’ve heard people say that this logic would mean that making people living people in houses in areas with a high flooding risk pay more in insurance is wrong: they haven’t seem to have thought about the fact that nobody forced you to buy houses in these places. You can’t help what gender you’re born as.

It’s a long shot, but maybe this forced equality will make companies start to relate their prices more closely to individual driving records, rather than on the basis of arbitrary groups. This would be the fairest way to do it.

Too hopeful? Probably, but it’s about time.

So my current view is that of (cautious) support for the principle of the ECJ’s decision about car insurance (despite probably having to pay more when I need to get car insurance myself in the future), but I’m not really sure if it would work the way everyone would hope.

Firstly, there are practical problems about how the ruling is carried out. Although I’m by no means an expert, the ruling will apparently increase uncertainty about risk margins so insurance companies need to increase the amount they take in to break even. They might also just take the chance as an excuse to raise some prices and not lower others in order to make a profit. Both of these would be detrimental to the consumer.

More worryingly, I’ve only been talking about car insurance: there are many other things the ruling would change. For example, at the moment men currently get higher annuities than women because they live longer on average. It isn’t really the same as it isn’t about small groups in this case: when all is said and done, there are some inherent differences between the sexes. It may be trivial in the light of promoting equality, but there may need to be some fine-tuning.

It is almost time for me to stop writing now: I’m not sure if everyone else is finding this topic as interesting as me. But perhaps the most fascinating questions about the ECJ ruling are the ones about the precedents it’s setting for the future for more directives from the EU about human rights (with the decision coming after the even more controversial rulings about prisoner’s voting rights) and about other discrimination issues.

How much power should we give the EU? Will this ruling prompt a debate about other forms of generally accepted discrimination (for good or bad), like age? These are examples of vast new topics that I won’t even attempt to discuss here.

Overall, it’s all very intriguing. I think it’s good that we are being made to consider important issues that have never really come to light before as a result of this (and other) rulings, but the most important thing is for people (the EU especially, but all of us) to consider everything fully.

It really is always necessary to give everything at least your first, second and then third glances.