ABI opposes age discrimination measures

by Gill Montia

Story link: ABI opposes age discrimination measures

The Association of British Insurers (ABI) is warning that all consumers could face higher insurance premiums and less choice because of new age discrimination legislation.

The proposed Equalities Bill could restrict the way in which insurers use age in their assessment of risk and according to the ABI, the cost of travel insurance alone could double.

In a report entitled “Age and Insurance: Helping older customers find the cover they need” the body points out that 98% of older customers are already able to find travel insurance and 99% motor insurance.

The ABI believes that taking age into account, where it is relevant, ensures that prices are fair to all.

For example, with motor insurance, the average cost of a claim made by someone aged over 80 is nearly 50% higher than one made by someone aged 60.

With regard to travel insurance, the average cost of a claim made by someone aged over 65 is nearly three-and-a-half times more than one made by someone under age 50.

The ABI proposes that outlawing age as a risk factor could mean that insurers employ more intrusive and costly approaches to setting a premium, such as individual medical assessments.

The Association’s director of general insurance and health, Nick Starling, sums things up, saying: “Insurers only use age where it is relevant, and restricting their ability to do so would rebound on all customers, through higher premiums and less choice.

Any legislation should tackle genuine discrimination, not insurance where the use of age helps to ensure a wide range of products at competitive prices.”