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On November 23 2010 15:59 Norway wrote:Show nested quote +On November 23 2010 15:55 MadVillain wrote:
I actually don't know why insurance companies don't ask what race you are, probably because there would be a shitstorm from overzealous civil rights groups. But it would be the same thing, if I spend years researching and find that on average asian drivers cost me more money then I would charge them more, because it would be good business. This is just the nature of insurance, its all based on risk assessment. Sorry if it hurts your feelings. It doesn't matter if it's good for business or whether it's the nature of insurance - it's main foundation is based off of discrimination which shouldn't be allowed in any forms. Blacks have predispositions to certain health risks - therefore health insurance companies can charge them higher premiums? That doesn't make a lot of sense. But as long as it's good for business...
The insurance business is extremely competitive, as is all big business. Denying them the right to run a highly efficient business model would be limiting the free market in a sense as it would be decreasing the competitiveness of the market. Whether
In regards to your example, in that case insurance companies actually wouldn't discriminate against you because you're black, they would discriminate against you based on health records/genetic background. Whether 0society deems this "morally fit" is up to society. Nevertheless, I think a "scientifically backed discrimination" is very different from how the word is being used in this thread, because at that point it comes down to logic, not questionable morals.
Edit:
To respond to your last post Romantic:
I think you're underestimating the amount of research that goes into determining insurance rates. The statistical data is anything but flimsy, insurance companies have been around for a long time and so has math, and billions of dollars have been spent on finding the best way to run an insurance company. Anyway you look at it insurance companies probably run the most efficient of businesses, and charging people on individual merit would cause them to lose money.
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testpat
United States565 Posts
On November 23 2010 12:36 Servolisk wrote:
I have seen little justification of the statistics used to determine rates.
Someone posted a link showing men are in more fatal accidents. That is obviously incomplete in scope and missing normalizing factors such as how many men vs. women are drivers, and how many men are in more risky driving jobs (taxi, truck, etc).
Secondly, even if women, overall, were completely less likely to be involved in accidents, it is not a highly useful statistic. Gender is very simple and highly variable; there are much better statistics the companies could use to more accurately fulfill their risk-assessment purposes.
Lastly, this is not justified given that the companies do not follow this with race and age (for the younger side of the scale they do, but iirc they do not compensate for elderly drivers, though I may be wrong). It is not justifiable to only selectively apply such general metrics.
Actual Loss Data
Some California class rating plans are available online. For example, you can find state farm's by this
http://www.insurance.ca.gov/0250-insurers/0800-rate-filings/0050-viewing-room/
select the Web Access to Rate and Form Filings (WARFF) link.
In Company: *State Farm* (include *'s)
In Line Type: Select Personal
In Line Description: Select Auto Phys/Auto Liab
In type of Filing: Select Class Plan
hit search.
Select the top filing (s/b 99-6333)
California is useful for this discussion for another reason; they mandate a specific set of factors that must be considered. They are (in order)
1) Safety Record
2) Mileage
3) Years Licensed
There's also a set of factors that they allow, and most companies use them. Age, sex, & marital status are normally combined, and State Farm's exhibit is 4.E-CP Page 1.
Sex is a differential in loss costs
If anyone wants, I can walk them through the exhibits. Basically, they show that State farm has a male-female cost differential after Safety Record, Mileage, and Years Licensed are considered. The indicated factors, based on comparable ages & marital status are:
0-5 Male 2.634
0-5 Female 2.134
6-8 Male 1.489
6-8 Female 1.388
* State farm has another factor that splits the years driven into finer categories, but doesn't impact male/female differentials. Good student discounts also differ for male/female changing the factors.
Basically, all insurance companies show this trend. Male drives who just got their licenses are extremely bad risks. Females are also bad with a few years experience driving, but get better quicker than males.
Best Loss Indicators
There's a lot of thought that there are better indicators than ASM (age sex marital status), but there's a lot of problems with them.
The first that everyone thinks is ... accidents. People who have accidents are more likely to have more accidents. While this is true, and state farm charges 2.5x the non accident rate for people who have major accidents, the overall percent of people this impacts (<5%) is small. It just doesn't account for everything.
Driving violations (speeding, etc) would seem to be important, but unfortunately have a similar problem. Major violation (mainly drunk driving) show a huge loss increase. Multiple minor violations show moderate increases. Unfortunately for insurers, a lot of states have implemented driving programs which remove points from driving records, reducing the usefulness of this.
Miles Driven is expensive to check, and even for companies that do check odometers every few years, not that useful. Type of driving (city, highway, time of day) is more important than overall mileage.
For California, and a lot of other states with large urban populations, location is a very good indicator of loss potential. Its also a huge political football because drawing the boundries of the location maps. Historically, race has been an issue here, as well as insurance accessibility and loss sharing (eg Reason rates in SF are expensive has to do both with natives and people driving into the city).
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The problem is that they are providing you with a service, and based on statistics completed by the insurance companies, they find that men are getting in accidents more than women. Because of this, the risk factor for being male and driving a car is increased.
This is a good business model. Why would you charge the men less if they are wrecking more cars? Its hard to say charge the women more to even it out because that is not fair either.
What I think should be looked into is whether or not these statistics are looking at all factors. If I were to make an assumption, it would be that there are more males driving at any given time than females. I mostly think this because in the city I live in, Taxi drivers, Police officers, bus drivers, truck drivers, mailmen, and UPS drivers all seem to be primarily male.
Here I could be wrong, but if all of these occupations are filled by men, and men are driving on the road more, wouldn't that be the reason why more men are in accidents?
Then again there are a ridiculous amount of soccer moms and when I was in traffic court recently I found most of the other defendants to be black females (however I do live in the city) but yeah I dont believe that being a male and an aggressive driver makes you more prone to being in an accident. I have never once hit any object on my own accord, driving for 6 years.
After reading around on the internet I discovered that mostly this "discrimination" is against the younger customers. Young males have higher rates than young females...and this makes sense t me. I also found numbers claiming that males drive up to 80% more miles than women. This would make them more likely to get in accidents.
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From Wikipedia (hate me if you want)
Actuarial science is the discipline that applies mathematical and statistical methods to assess risk in the insurance and finance industries. Actuaries are professionals who are qualified in this field through education and experience. In India, the United States, Canada, the United Kingdom, and several other countries, actuaries must demonstrate their competence by passing a series of rigorous professional examinations.
Actuarial science includes a number of interrelating subjects, including probability, mathematics, statistics, finance, economics, and computer programming. Historically, actuarial science used deterministic models in the construction of tables and premiums. The science has gone through revolutionary changes during the last 30 years due to the proliferation of high speed computers and the union of stochastic actuarial models with modern financial theory (Frees 1990).
Insurance companies don't just casually look at the latest statistics to determine insurance rates, there is an entire field of study dedicated to it.
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On November 23 2010 15:59 Norway wrote:
Blacks have predispositions to certain health risks - therefore health insurance companies can charge them higher premiums? That doesn't make a lot of sense. But as long as it's good for business...
In the USA, predispositions are built into your health insurance premium. People who have family history of heart disease get charged more. People who have chronic conditions get charged more. My friend who is on several meds pays about 10k a year in health insurance whereas I, who haven't seen a doctor in 5 years, pay less than 2k. My plan even has better coverage.
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testpat
United States565 Posts
On November 23 2010 16:15 Rage178 wrote:
The problem is that they are providing you with a service, and based on statistics completed by the insurance companies, they find that men are getting in accidents more than women. Because of this, the risk factor for being male and driving a car is increased.
This is a good business model. Why would you charge the men less if they are wrecking more cars? Its hard to say charge the women more to even it out because that is not fair either.
What I think should be looked into is whether or not these statistics are looking at all factors. If I were to make an assumption, it would be that there are more males driving at any given time than females. I mostly think this because in the city I live in, Taxi drivers, Police officers, bus drivers, truck drivers, mailmen, and UPS drivers all seem to be primarily male.
Here I could be wrong, but if all of these occupations are filled by men, and men are driving on the road more, wouldn't that be the reason why more men are in accidents?
Then again there are a ridiculous amount of soccer moms and when I was in traffic court recently I found most of the other defendants to be black females (however I do live in the city) but yeah I dont believe that being a male and an aggressive driver makes you more prone to being in an accident. I have never once hit any object on my own accord, driving for 6 years.
After reading around on the internet I discovered that mostly this "discrimination" is against the younger customers. Young males have higher rates than young females...and this makes sense t me. I also found numbers claiming that males drive up to 80% more miles than women. This would make them more likely to get in accidents.
Commercial business is priced/rated separate from personal business. So UPS, taxi, cops, etc, are not grouped with non business drivers.
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On November 23 2010 16:09 Romantic wrote:Show nested quote +On November 23 2010 15:56 Risen wrote:
I think I see your point, so let me try to come around to it and you tell me if I'm right or not. Fuck it, explain it to me. I've been sitting here for five minutes trying to figure out what you're saying and I can't wrap my mind around it. I keep coming back to the fact that these variations within gender should be distributed evenly and taken into account during previous studies I am saying that aggregate data that shows correlation over two broad groups is a very flimsy defense of discrimination. You seemed to want to show that men and women are different and that it justifies the discrimination. We got that, but you must also show that there isn't significant variation within genders. If there is significant variation within genders (there is) then the discrimination is purely based off of laziness, weak correlation and profit seeking rather than causation. I advocate individual assessments as a goal of reform, as I stated in my last post.
I don't have to prove anything above variation within genders, all I have to prove is variation across genders, and show that such is spread by a significant amount.
Both my link http://editorial.autos.msn.com/article.aspx?cp-documentid=788126
and the statistics from the poster above me show that there IS a significant difference between young males and females. I can imagine there are similar statistics across various demographics that justify price changes that vary with area as well.
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On November 23 2010 16:11 MadVillain wrote:Show nested quote +On November 23 2010 15:59 Norway wrote:On November 23 2010 15:55 MadVillain wrote:
I actually don't know why insurance companies don't ask what race you are, probably because there would be a shitstorm from overzealous civil rights groups. But it would be the same thing, if I spend years researching and find that on average asian drivers cost me more money then I would charge them more, because it would be good business. This is just the nature of insurance, its all based on risk assessment. Sorry if it hurts your feelings. It doesn't matter if it's good for business or whether it's the nature of insurance - it's main foundation is based off of discrimination which shouldn't be allowed in any forms. Blacks have predispositions to certain health risks - therefore health insurance companies can charge them higher premiums? That doesn't make a lot of sense. But as long as it's good for business... The insurance business is extremely competitive, as is all big business. Denying them the right to run a highly efficient business model would be limiting the free market in a sense as it would be decreasing the competitiveness of the market.
How is it a free market when the state of Minnesota states I need car insurance to be able to drive a car. Seems like my hands are tied. All I'm saying is that they can find a better way without bringing sex into it; like I said before, starting everyone off at one rate and depending on how they do adjust it until it fits. Don't put me into a category with idiotic drivers - whether they be men or women. Make the bad drivers pay more and reward the good drivers - makes sense to me whether you're a woman or a man.
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If this case was any other industry I would agree with the statements in the OP, however since this is in regards to the insurance industry I simply can't. It is impossible to be unbiased in an industry in which ones customers pay a relatively small fee (compared to the potential pay out on a claim) for essentially protection against having to take a lump sum of money out of their pocket in case of the unexpected. Furthermore in the case of car insurance it ensures that in the event of an unfortunate accident you do not have to pay (at least not in full) for the potentially extremely costly legal and other fees. As such the company must be very biased about how it assesses customers because it can't very well give a cheap rate to a known poor driver no more than it can give a lesser rate to certain gender/age/race groups than others because statistics whether we like it or not show that certain parts of any given group have better or worse driving statistics.
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On November 23 2010 16:24 Norway wrote:Show nested quote +On November 23 2010 16:11 MadVillain wrote:On November 23 2010 15:59 Norway wrote:On November 23 2010 15:55 MadVillain wrote:
I actually don't know why insurance companies don't ask what race you are, probably because there would be a shitstorm from overzealous civil rights groups. But it would be the same thing, if I spend years researching and find that on average asian drivers cost me more money then I would charge them more, because it would be good business. This is just the nature of insurance, its all based on risk assessment. Sorry if it hurts your feelings. It doesn't matter if it's good for business or whether it's the nature of insurance - it's main foundation is based off of discrimination which shouldn't be allowed in any forms. Blacks have predispositions to certain health risks - therefore health insurance companies can charge them higher premiums? That doesn't make a lot of sense. But as long as it's good for business... The insurance business is extremely competitive, as is all big business. Denying them the right to run a highly efficient business model would be limiting the free market in a sense as it would be decreasing the competitiveness of the market. How is it a free market when the state of Minnesota states I need car insurance to be able to drive a car. Seems like my hands are tied. All I'm saying is that they can find a better way without bringing sex into it; like I said before, starting everyone off at one rate and depending on how they do adjust it until it fits. Don't put me into a category with idiotic drivers - whether they be men or women. Make the bad drivers pay more and reward the good drivers - makes sense to me whether you're a woman or a man.
It's a free market because you have MANY options to choose from. Also, the reason car insurance is required is because if you wreck someone and you don't have the money to pay you've essentially fucked someone else.
You might argue, "Well that's taking away my liberty by forcing me to have insurance" you'd be somewhat correct on that point, but the classical counter-argument (and it's held up since the advent of forced insurance so don't try to argue it in this thread) is that driving is a privilege being granted, you're free to walk anywhere you want to. (or ride a bike, or a horse, or public transport, etcetcetc)
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If it were legal to pay women ~70% of what one would pay a man for the same work (hint: it's not), women would comprise approximately 100% of the workforce. This is capitalism - petty sexism trumps the almighty dollar? Please.
EDIT - A bit more on topic, it is sexist to charge men more. Unfortunately, statistics justify this and our premiums won't change until our risk does. Tell your 'macho' friends to slow the fuck down and pay attention behind the wheel if you want that to change.
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On November 23 2010 16:37 EzCheeze wrote:
If it were legal to pay women ~70% of what one would pay a man for the same work (hint: it's not), women would comprise approximately 100% of the workforce. This is capitalism - petty sexism trumps the almighty dollar? Please.
EDIT - A bit more on topic, it is sexist to charge men more. Unfortunately, statistics justify this and our premiums won't change until our risk does. Tell your 'macho' friends to slow the fuck down and pay attention behind the wheel if you want that to change.
This is misleading. Of course it's not legal to pay women less for the same amount of work. The issue that comes up here (mainly in construction) is that it is illegal to pay women less than their male counterparts, in spite of how much work they do, as long as they are putting forth the same amount of "effort"
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I skimmed through a lot of posts since there is 19 pages but uhmmm I think everyone is right in the argument... everybody has good points, but like alot have said, insurance companies are out there to make tons of money, some people win and some lose... thats why theres so much competition and you can switch to another company that might be cheaper to you. It's a service they are providing to you and they pretty much are gonna charge whatever they feel is worth for them, NOT YOU. It's like looking for jobs, they say they dont discriminate, etc... but trust me of course they discriminate, they just hide it and try to be careful...
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While the statistical basis for the rates is certainly necessary, I do not think that it is the primary reason for why there would be a gender rate difference (as opposed to whatever other possible characteristic differences among people that you could come up with).
While I do not work in the insurance industry, I imagine society's reception of their policies is something that they have to put a lot of thought into. As you would imagine a policy that decided rates based on previous accidents would be far less controversial than a policy which decided rates based on their ethnicity. Assuming a strong and equal statistical basis were to exist for each of these, it is unlikely that they would be carried out equally because of how society would view them differently.
I think that in the case of higher rates for males, the insurance company likely found that society would not view this as controversial enough to cause problems. Why society views discrimination based on money, age, gender, history, and race all differently? I don't know. Is it okay to? I don't know.
I hate morality issues and I'm not even going to try to come up with an opinion on what I think is "right" in this situation. This is just why I think it is the situation. It'd take someone with more knowledge in sociology, though, to really get to the core of issue. I don't think this really has much to do with statistics, though... (Beyond that statistics are obviously a basic requirement for any proposed insurance policy).
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Hmmm, what if they included race in their equation. Certain racial groups probably have more accidents than others.
Insurance companies would not be able to get away with that surely, so how can they can do this with gender?
Interesting subject.
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I still don't think it is discrimination.
What if I go to a nightclub and it is girl's night. The drink for any girls is half the price!!
Is that discrimination?
Or if i go to buffet restaurant, and they charge everybody according to their weight, is that discrimination?
What about when I go to the barbershop and they charge a guy lower than they charge a women?
I don't think these are discrimination, they charge different price because the service they give to each gender has different cost, risk.
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On November 23 2010 20:13 pedduck wrote:
I still don't think it is discrimination.
What if I go to a nightclub and it is girl's night. The drink for any girls is half the price!!
Is that discrimination?
Or if i go to buffet restaurant, and they charge everybody according to their weight, is that discrimination?
What about when I go to the barbershop and they charge a guy lower than they charge a women?
I don't think these are discrimination, they charge different price because the service they give to each gender has different cost, risk.
maybe i have a little small brain and cant think deeper, but what you just said makes alot of sense ... I mean, its the truth
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On November 23 2010 20:13 pedduck wrote:
I still don't think it is discrimination.
What if I go to a nightclub and it is girl's night. The drink for any girls is half the price!!
Is that discrimination?
Or if i go to buffet restaurant, and they charge everybody according to their weight, is that discrimination?
What about when I go to the barbershop and they charge a guy lower than they charge a women?
I don't think these are discrimination, they charge different price because the service they give to each gender has different cost, risk.
If a restaurant makes a decision to charge a person more because of their weight, they're making a decision based upon them as an individual, not their gender.
I'm male. I'm probably the safest driver you will ever meet. I hate cars and drive as little as possible and would never do anything reckless. I'm a good driver, but have no interest in showing off and other behaviour some people are prone to. I can't parallel park to save my life, but I would never attempt to. I'm well aware of what I can and can not do. Why should I pay more just because some reckless idiots I've never met and have nothing in common with except sharing similar chromosomes? There are some pretty reckless female drivers out there, just not as many. These are generalisations. The idea that every male or female driver is the same based on their sex is of course ridiculous.
When younger, I actually had long hair and cutting it would take more time and effort than it would for most men. I had a female friend at the time who liked her hair short and wasn't very vain. Her hair required less time and effort to cut than mine. So how is it fair that I would be charged less than her based simply upon the fact she has breasts and I don't?
Of course, it's difficult to make a decision on someone's driving ability as an individual, but making generalisations against 50% of the population just because they all share a penis is still discrimination in my opinion.
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On November 23 2010 17:53 his_shadow wrote:
Hmmm, what if they included race in their equation. Certain racial groups probably have more accidents than others.
Insurance companies would not be able to get away with that surely, so how can they can do this with gender?
Interesting subject.
Most HMOs in the United States include race in their actuarial tables.
In Canada health care is free and universal, so we don't have to worry about that. But if it was private, it wouldn't surprise me in the slightest if they judged me based on race/occupation/gender/age. That's what they do.
For all of those who think that since you're required to buy car insurance it should be non-discriminatory, run for office on a platform of making car insurance government-run. Until then, insurance companies will continue to judge people based on seemingly arcane points of fact.
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... How is gender or race arcane? Given a large enough data sample I could run an OLS and tell you how much more likely X group is to be a crash than X group due to the general behaviors of members of X group...
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EPT
