The British Insurance Brokers’ Association (BIBA) has welcomed the Government Equalities Office’s consultation paper ‘Equality Bill – Consultation on age discrimination in the provision of services and the exercise of public functions.’
The paper outlines three options of how an insurance exemption from the Equality Bill might be framed. BIBA has lobbied for option two and the Government has stated that it is their preferred option.
The three options are:
Option 1 is strict implementation of the ban on age discrimination with objective justification.
Option 2 is a tailored specific exception allowing for age to be used provided that it is proportionate to risk and costs, allowing the use of age bands and limits, along with a signposting service.
Option 3 will allow for current practices to continue.
· BIBA opposes unfair age discrimination
· BIBA supports risk based pricing
· BIBA welcomes signposting
BIBA is concerned that many people buy their insurance from the internet or by telephone, and it is often here where insurers refuse cover. The result is that the customer feels let down and left without insurance protection. Cover is readily available from insurance brokers, but consumers need guidance - through signposting - to direct them to the most appropriate cover, and ensure they are not at risk.
BIBA believes that if insurers can show that individuals are more likely to make more frequent and higher claims, then risk based pricing means that a proportionate uplift in premium should apply.
Graeme Trudgill, BIBA Technical and Corporate Affairs Executive, commented: “The government has got the balance right in the proposed legislation, helping customers while avoiding any unintended consequences for the insurance industry. It is a great achievement to have Government support for our position at this early stage in the consultation, especially with the intense lobbying from other bodies.
“Our members are able to offer access and availability to fairly priced insurance to consumers of all ages. We do not believe there is a market failure for older or younger people seeking insurance, particularly travel or motor.”
Peter Staddon BIBA Head of Technical Services added: “BIBA completely oppose unfair age discrimination. We believe that a fair system to help consumers, but does not force insurers to cover areas they have never dealt with, can be reached through proportionate risk based pricing and signposting. BIBA met with the Government Equalities Office yesterday and we will be doing their utmost to push this through.”
The consultation will close on 30th September 2009.
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Notes to editors
1. For further information please contact:
BIBA press office:
Leighann Burtrand, Communications Manager
020 7397 0223
burtrandl@biba.org.uk
2. An explanation of ‘signposting’
BIBA describe “signposting” as – ‘A way of helping customers who were turned down at the point-of-sale (telephone, Internet, face to face,) by a financial services provider on the basis of their age. Customers would be ‘signposted’ by the declining company to an independent source of information about providers that did offer the relevant product.’
BIBA welcomes any signposting solution by way of our local rate consumer helpline 0870 950 1790 (free to BT callers). This is available for any consumer with a query on how to access relevant insurance cover. This service is already in place and currently receives around 40,000 calls per year. Our website receives 200,000 hits per year in the find a broker section)
BIBA outlined to the Treasury, the Government Equalities Office and to the standing committee of the Equality Bill that its members are able to offer access and availability to fairly priced insurance to consumers of all ages and that insurers should signpost such consumers to BIBA’s consumer helpline which can find a suitable broker to provide cover.
3. About British Insurance Brokers' Association
The British Insurance Brokers’ Association (BIBA) is the UK’s leading general insurance organisation representing the interests of insurance brokers, intermediaries and their customers.
BIBA membership includes 1700 regulated firms. Insurance brokers and intermediaries distribute nearly two-thirds of all UK general insurance. In 2007, insurance brokers and intermediaries generated £1.5 billion of invisible earnings and they introduce £22 billion of premium income into London’s insurance market each year.
BIBA is the voice of the industry, advising members, the regulators, the Government, consumer bodies and other stakeholders on key insurance issues. BIBA provides unique schemes and facilities, technical advice, guidance on regulation and business support and is helping to raise, and maintain, industry standards. BIBA works closely with the Chartered Insurance Institute to provide training to those working in the industry and actively participates in helping the industry and its customers deal with some of the major issues of the day.
BIBA members provide professional advice to businesses and consumers, playing a key role in identification, measurement, management, control and transfer of risk. They negotiate appropriate insurance protection tailored to individual needs and operate to a very high standard of customer service with the aim of ensuring peace of mind, security, financial protection and the professional advice required.
To find your nearest BIBA broker visit the ‘Find A Broker' section of the BIBA website, www.biba.org.uk or call BIBA’s consumer helpline on 0870 950 1790
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