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One percent

Insurance actuaries doing their job or discrimination?

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http://www.dailymail.co.uk/news/article-5296567/Making-prophet-Drivers-named-Mohammed-charged-MORE.html

Drivers called Mohammed are being charged almost £1,000 more to insure their vehicles than motorists with traditional British names.

Huge insurance companies such as Admiral, Diamond, Bell, Elephant and Marks & Spencer were found to charge less when a driver has the name 'John Smith'.

A John Smith living in Leicester was offered a quote of £1,333 to insure an 11-year-old Ford Focus with fully comprehensive cover.

However, by just changing the name to 'Mohammed Ali' the figure rocketed to £2,252 - almost £1,000 more. 



My view fwiw, is that the insurance companies are pricing in the risk.  We have all seen the death and destruction that follows some young men of a certain community. I've experienced their driving first hand and am continually suprised that they don't cause more carnage. 

So, are the insurance companies right to load policies to reflect the risk (I'm suprised that they do), or should the rest of us be made to carry the risk in the name of equaliteeee?  

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Insurance version of Hanlon's razor (Never attribute to malice that which is adequately explained by stupidity.) Basically "Never attribute to prejudiced that which is adequately explained by profits". 

I'm little doubt that if you looked at claims made in the past few years it's far riskier to insure people called Mohammed than John. A lot of them will have taken their driving test in a country with a far inferior standard than here. 

Similar to where I live there is a large African population, the standard of driving is atrocious, noticeably worse than other areas I visit regularly. However it won't effect their premiums, mainly because a large number of them won't bother with insurance or tax. If they even had a licence I think that would be a bonus. 

 

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8 minutes ago, One percent said:

So, are the insurance companies right to load policies to reflect the risk (I'm suprised that they do), or should the rest of us be made to carry the risk in the name of equaliteeee?  

Yes, insurance companies are right to load policies to reflect the risk.

Different groups have different risk profiles.

(Do you really mean that you are surprised that they do ?)

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Just now, Hopeful said:

Yes, insurance companies are right to load policies to reflect the risk.

Different groups have different risk profiles.

(Do you really mean that you are surprised that they do ?)

But I thought the EU had banned all that (well, banned it for Male/female risks anyhow).

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5 minutes ago, Melchett said:

But I thought the EU had banned all that (well, banned it for Male/female risks anyhow).

Yes, know what your saying

But, risk profiles never went away, nor should they. It's presumably why I pay £250 for a new pickup and someone 30 years younger pays over 1K for a second-hand fiesta.

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The only fair thing is to have tracking devices in every car. And a requirement for your details as driver to be registered with the insurance company / box. 
And then this is checked every time you refuel your car (where ever you do that) 
And for this wonderful gadget to stop the car from moving if you're not insured.

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52 minutes ago, One percent said:

http://www.dailymail.co.uk/news/article-5296567/Making-prophet-Drivers-named-Mohammed-charged-MORE.html

Drivers called Mohammed are being charged almost £1,000 more to insure their vehicles than motorists with traditional British names.

 

I guess if they could make a "prophet" out of charging less they would, it is a competitive market looking for business. Obviously business from followers of the prophet is less than prophetable. Inch'Allah.

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42 minutes ago, Hopeful said:

Yes, insurance companies are right to load policies to reflect the risk.

Different groups have different risk profiles.

(Do you really mean that you are surprised that they do ?)

I'm surprised that they do it on grounds that can be interpreted as discrimination.  Remember the debacle over charging women less than men?  

What they need to do is to charge all indigenous people more, never mind the risk.  Thus they will be seen as diversity compliant.  

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Just now, One percent said:

I'm surprised that they do it on grounds that can be interpreted as discrimination.  Remember the debacle over charging women less than men?  

What they need to do is to charge all indigenous people more, never mind the risk.  Thus they will be seen as diversity compliant.  

I just thought the article inferred that dead boxers were a higher risk ?

and TBH, you can kinda understand

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Doing their job.

Despite people thinking otherwise, insurance companaies do crunch and compare claims.

The computers will pick out correlating details.

Postcodes are well known - price of car insruances shifts rapidly if you move from a YO postcode to a TS.

Ditto Bradford and Bham.

The machines just picking out the many many scams initiated from Muzzers - whiplash scams, driving like a loon, not having a license etc etc.

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2 minutes ago, spygirl said:

Doing their job.

Despite people thinking otherwise, insurance companaies do crunch and compare claims.

The computers will pick out correlating details.

Postcodes are well known - price of car insruances shifts rapidly if you move from a YO postcode to a TS.

Ditto Bradford and Bham.

The machines just picking out the many many scams initiated from Muzzers - whiplash scams, driving like a loon, not having a license etc etc.

Indeed this smacks of some sort of machine learning analysis doing its job a bit too efficiently for some peoples liking.

Of course you also have bear in mind that insurance as a viable business relies on some degree of inefficiency in risk pricing order to get those who are low risk to subsidies those who are high risk to some degree.

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6 minutes ago, goldbug9999 said:

Indeed this smacks of some sort of machine learning analysis doing its job a bit too efficiently for some peoples liking.

Of course you also have bear in mind that insurance as a viable business relies on some degree of inefficiency in risk pricing order to get those who are low risk to subsidies those who are high risk to some degree.

Software is not racist, just correlating ...

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The article makes little sense:

Mohammed Butthurt claims: 'It's racism, pure and simple.'

So is Mohammed a name reserved only for certain races, I think not.

Mr Butthurt then claims his premium with Admiral went up by £166 when they found out his first name was Mohammed - and not Suleman.

Mohammed, Suleman ? So where is the racism again?

The Association of British Insurers then claims that discrimination is 'unlawful and unacceptable'.

I guess they don't understand the insurance business, which discriminates against high risk drivers with higher premiums.

 

 

 

Edited by davidg

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I'm very sure this is fake news. I'm in the insurance risk calculation business and, outside of some machine learning experiments, no-one uses any kind of pricing model that includes ethnicity or religion* - explicit or derived from names - as an input. I'm not saying that no-one has every analysed the data on that basis (most big insurance companies certainly have at some point) but no-one would be dumb enough to use it for pricing. That's the sort of thing that gets people sent to jail in Western countries at least.

* There are discounts available for "ministers of religion" in some cases, but that's occupational so is a different category.

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I never saw the case for removing the lower premiums for women because it is only based upon demonstrable statistics.

So now women subsidise men when it comes to insurance premiums. Cheers ladies, but it's hardly fair.

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7 minutes ago, Frank Hovis said:

I never saw the case for removing the lower premiums for women because it is only based upon demonstrable statistics.

So now women subsidise men when it comes to insurance premiums. Cheers ladies, but it's hardly fair.

It's perfectly fair. I didn't choose to be born male, so why should I get lumped in with all the boy racers?

I suppose you could solve the problem by offering free sex changes on the NHS to anyone who's fed up with being discriminated against because of their sex. Simpler just to ban the discrimination though, eh.

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8 minutes ago, Rave said:

It's perfectly fair. I didn't choose to be born male, so why should I get lumped in with all the boy racers?

I suppose you could solve the problem by offering free sex changes on the NHS to anyone who's fed up with being discriminated against because of their sex. Simpler just to ban the discrimination though, eh.

I agree that insurance companies should not be allowed to set premiums using any innate characteristic except age  - only things that are personal choices.

 

Edited by goldbug9999

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2 minutes ago, goldbug9999 said:

I agree that insurance companies should not be allowed to set premiums using any innate characteristic except age  - only things that are personal choices.

 

I identify as a 26 year old. 

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