Older people may have to pay more for their policies but this is not discrimination, insurers say
Equalities bill should not affect insurance
Thursday, 26 Jun 2008 14:03
Insurers warned unless the government excludes financial products from its proposed equality bill, prices could be pushed up across all age groups.
Equalities minister Harriet Harman presented the proposals, which aim to tackle age and gender discrimination in the workforce, to MPs on Thursday as part of the equalities bill.
But insurers should still be allowed to charge more on certain policies for consumers over a certain age, the Association of British Insurers (ABI) has claimed.
Legislation, "no matter how well-intentioned, could have the unintended negative consequence of forcing some insurers to withdraw certain products altogether" the ABI said, which would reduce competitiveness and force prices up across the industry.
"A person over 65 is eight times more likely to claim on their travel policy than a person under 50 and the claim will be three and a half times more expensive," spokesperson Malcolm Tarling added.
Online insurer Karma claims age discrimination is rife in the insurance industry, and hopes the proposed bill will put a stop to it.
Managing director Brian Wright said: "I'm delighted the government recognises that the majority of insurers do not meet the needs of elderly travellers - our research reveals just how wide age discrimination is.
"Over a third will not cover those aged 65 plus and around 70 per cent refuse to cover the over 75s. Those who do provide cover are quoting extortionate premiums - how can the difference between our premium of £25.03 and the most expensive at £208.70 be justified? And this price gap gets wider with age."
But the ABI disagrees. "We think the real issue is not availability, because there are specialist insurers out there, the issue is how we can get people to know of these insurers," Mr Tarling said.
If the government does not make an exception for insurers in its bill, insurers may simply withdraw cover for older people altogether, the ABI warned.
Some insurance products may even be cheaper for older people – home contents insurance, for example, as retired people are more likely to be at home in the daytime. Car insurance also tends to go down for the over 50's.
In a survey of Saga customers, 86 per cent "feel it acceptable to sell products such as holidays and car insurance that are confined to specific age groups".