Gender binary no longer suitable for auto insurance, according to Vero
Offering auto insurance premiums based on the gender of the client is no longer suited to a changing New Zealand company, says Vero Insurance.
The insurer strives to remove gender factors from its pricing and underwriting for personal auto insurance.
Sacha Cowlrick, executive director of consumer insurance at Vero, said there has traditionally been strong evidence that gender can determine the likelihood of a customer making a claim and was a legitimate part of building a profile. risk of a person.
It has been reported that young women in particular are less likely to have an accident than young men, but the risk of older women may be higher.
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But she said the company was still looking to see if the products were relevant and the binary distinction between men and women was not a reflection of modern New Zealand these days, nor a true reflection of the gender spectrum. from Vero customers.
“Historically, insurers have compared data from ‘male’ and ‘female’ clients, but New Zealanders identify with a much wider range of gender identities,” she said.
“As a business, we had the flexibility to try and price or price a more diverse range of genres, but we decided it was easier and more inclusive to start the process of removing gender from our. subscription. ”
Cowlrick said the process is complex and will take at least 12 to 18 months.
“There is strong evidence that gender and age together are factors that can help determine the likelihood of customers making a claim, and gender can have a significant impact on the price for certain age groups,” she declared.
“If we were to suddenly remove the gender note on bonuses, it would cause big changes in the bonuses for some customers when renewing. We need to do a little bit of background work to essentially ‘smooth out’ the price differences to ensure that when we do away with gender as a factor altogether, it won’t create sudden premium changes that customers aren’t. prepared.
It wouldn’t be as easy as women facing higher costs in the future, she said. “There is mutualisation of risks and cross-subsidies.
She said customers would see a change in premiums over time, but it wouldn’t be a “big bang”.
“It’s the start of a journey rather than making noise, we are aware of how we are dealing with change. “
The company increasingly had the ability to use real data on how people were driving and that would impact pricing in the future, she said. “As cars increasingly become computers on wheels that will grow. “