The Independent claimed an exclusive over the weekend with its coverage of a row between the ABI and age campaigners over The Equality Bill due before parliament this spring.
The new legislation could prevent insurers using age as a rating factor when setting motor insurance premiums. The ABI’s Malcolm Tarling claims this will result in disastrous premium increases for motorists across the board.
“The simple truth,” Tarling explains, “is that age is an important factor. Take travel insurance for instance,” he offers, “the cost of a claim made by someone over 65 is three and half times more than one made by a younger person. As for motor insurance, claims made by 80-year-olds are nearly 50 per cent more expensive than those made by someone aged 60. It is only fair that premiums reflect this extra risk.”
Presenting the other side of the argument Age Concern policy adviser Nony Ardill (sic) said, “The ABI think the sky will fall in if this legislation happens, which is nonsense. Age can still be a factor in determining premiums and we recognise that there is an increase with, say, travel insurance risk as a policyholder get older. However, what needs to end is the arbitrary way insurers raise premiums when a certain age is passed ‚ someone hits 70 and suddenly their motor or travel premium doubles ‚ and we absolutely oppose the practice of some providers which refuse to quote on grounds of age,” she said.
The Independent also quotes Jack Neil-Hall from Help the Aged who believes there is a lack of transparency on how insurers arrive at a premium and says he “would like to see premiums calculated with the individual circumstance of the policyholder in mind rather than based on date of birth.”
But Tarling is reported to have claimed “it’s not cost effective or practical for insurers to do an in-depth analysis of individuals.”
He also claims that “The link between age and accidents is undeniable. For example, the under 25s are much more likely to have crashes as they are less experienced and that is why their premiums are much higher. If we weren’t allowed to take this into account, it would inevitably raise premiums for older drivers.”