BIBA response on Equality age discrimination in services, public functions and associations.
25th May 2011
The British Insurance Association (BIBA) is the UK's leading general insurance organisation representing the interests of insurance brokers, intermediaries and their customers.
BIBA membership includes 1,700 regulated firms. BIBA brokers handle around half the value of all UK home, contents, motor, travel, commercial and industrial insurance policies. Insurance brokers make a direct and indirect contribution of 1% to UK GDP.
The UK insurance industry employs more than 275,000 people, generates more than £1.5 billion of insurance premium tax and £2 billion of corporation tax.
Brokers provide professional advice to businesses and individuals, playing a key role in the identification, measurement, management, control and transfer of risk. They negotiate appropriate insurance protection tailored to individual needs.
BIBA is the voice of the industry advising members, the regulators, 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 strongly believe that improving access to financial services for particularly young drivers, older drivers and older travellers seeking insurance is important and signposting is the most effective way to achieve this.
Our response to the 19 questions is set out below:
- Are there any other ways that age is used as a criterion to determine access to and eligibility for health and social care services that we have not considered?
- Do you think implementing the ban on age discrimination in relation to health and social care without specific exceptions will have a negative or positive impact on people of a particular age? If you consider that it will have a negative impact what action could be taken to minimise this?
- Are there any areas in health and social care in Scotland or Wales where you believe that there may be differences in approach to the use of age in decision making compared to England?
- Does exception 2 (financial services) in the proposed draft Order in Annex 1 adequately achieve the policy intent described in paragraph 6.1 – 6.10 above? If not, or you are not sure, please explain why.
BIBA is satisfied with the proposed draft order as stated.
- Do you agree that a service level agreement signed by both the ABI and the Government showing how age is used when assessing risk and pricing products is an effective way to achieve improved transparency?
Yes, BIBA supports the idea of a service level agreement signed by the ABI and the Government showing how age is used when assessing risk and pricing products as an effective way to achieve improved transparency. The agreement should be proportionate and the design should be in such a way that it does not require unreasonable costs in meeting its needs.
- Do you agree that a service level agreement signed by BIBA, ABI and Government, agreeing that a signposting/referral system should be set up so that those refused an insurance product, because of their age, are referred to a supplier that can help them; is an effective way to achieve improved access.
Yes, BIBA believes that improving access to financial services for particularly young drivers, older drivers and older travellers seeking insurance is important.
Many customers experience difficulty obtaining insurance because they do not know where to find it if they have been rejected from a particular provider – e.g. their bank or a comparison site, as not all providers cover all age groups.
However, cover is widely available from insurance brokers for all ages and BIBA believes it is simply a case of having and promoting a system where the rejected customer will receive helpful guidance from a simple and practical system of ‘signposting’ them towards a suitable insurance provider – either an organisation who the seller knows can help, or to a “catch all” dedicated signposting centre like BIBA’s helpful service.
BIBA already operates a successful, established signposting service via our Find a Broker call centre and website, helping more than 1,000 people every working day access cover. This system matches the principles discussed by the HM Treasury Signposting Steering Committee, although it is not something that has been historically promoted to a great degree. BIBA is therefore working closely with the ABI on an industry level agreement and code of practice to encourage signposting widely across the insurance industry.
The agreement will establish a framework for insurance providers to help customers improve access to insurance by signposting or referral by:
· Making it a BIBA commitment to promote signposting and referral. Supporting our members with their ability to do this by running a dedicated call centre and find a broker website.
· Providing annual data to HM Government on the number of age related motor and travel policies signposted to the dedicated signposting solution provided by BIBA.
· Creating a system of communication and education to help introduce and grow the activity of signposting or referral.
The system we have in place is already a success and many charities and insurance providers currently signpost to BIBA – who in turn match the client with a suitable provider.
The next step in achieving the ‘effective way to improve access’ as stated in question six is by putting in place a service level agreement with the ABI and government so signposting is promoted and guidelines provided. By doing this the BIBA system will receive far wider levels of awareness and support from all sellers of motor and travel insurance. We strongly believe this to be the solution.
Although the problems highlighted by this consultation and the Equality Act are in regard to Age, BIBA’s service also enables multiple risk factors (e.g. pre-existing medical conditions) to be taken into account when finding cover and is available to people of all ages.
BIBA’s service currently helps more than 300,000 people find cover each year and the majority of those who contact the service citing age as an issue are directed to appropriate cover through 1,700 brokers offering hundreds of specialist policies.
Approximately 34% of all the queries received by BIBA are age related. The approach of a signposting agreement will maximise the likelihood of older customers finding insurance.
Here are some examples of real life travel insurance case studies that the call centre has taken that show we are able to help older travelers as well as older travellers with high risk medical conditions.
Mr. A – The BIBA signposting service was able to place an 84 year old customer with a suitable broker who could cover him going to Mexico (2nd – 9th February 2011)
Mrs. S – Signposted an 84 year old who has arthritis and osteoporosis going to USA for a month (10th Apr – 10th May 2011)
Mr. G – Helped to arrange with a BIBA broker for an 82 year old who had an Implantable Cardioverter-Defibrillator fitted in 2006 a heart attack in 1994 and takes cholesterol medication for a trip to Canada (middle of August to middle of September 2011)
Mrs. T – Cover arranged for an 84 year old with no medical conditions going to Portugal (10th – 24th May 2011)
Mr. and Mrs. M – Cover arranged for an 86 year old man (heart attack in 2001; diagnosed with a benign prostate tumor in 2008; and takes blood pressure and cholesterol medication) and his 85 year old wife (hypertension; takes blood pressure medication) going on a cruise around Spain, Portugal and Gibraltar (18th – 27th September 2011)
Ms M – Cover for mother (85 years old, taking blood pressure medication, broke shoulder in Jan 2010, smokes), going to USA (19th January – 7th April 2011)
Ms P – Arranged cover for an 85 year old who had a heart attack in 1990 and has type 2 diabetes, takes blood pressure and cholesterol medication going to USA (3rd April – 2nd May 2011)
Ms N – Arranged cover for a 90 year old going to Spain who had a heart valve replaced in November 2009 and a pacemaker in 2008, and takes blood pressure and cholesterol medication (2nd – 22nd April 2011)
Mr. R – Arranged cover for an 82 year old who has an irregular heartbeat for a trip to New Zealand (20th February – 3rd April 2011)
Mr. H – Arranged cover for an 84 year old who has an oesophagus problem which required endoscopy treatment in 2008 (already left the UK for US on 8th December 2010, returning 6th March 2011)
We are keen to work with the Government to develop an industry-led solution for motor and travel insurance. This will be supported by an agreement to improve consumer outcomes without the risk of unintended consequences for consumers and insurers in other product markets where there is no evidence of market failure.
The insurance industry remains committed to improving access to insurance for drivers and travellers of any age, and helping consumers to better understand the link between their age and the price they pay for cover. Both ABI and BIBA will continue to work together on these important issues and are keen to improve consumer outcomes.
BIBA would also produce a signposting script for broker websites and broker staff to use to help ensure the activity is adopted in the required way.
BIBA would report a market overview to HM Treasury on an annual basis confirming:
- Website enquiries for age on travel and motor
- Call centre enquiries for age on travel and motor
- Are there any instances where the customer experience of people of different ages in accessing financial services (apart from questions of design, delivery, transparency, access already addressed) causes concerns? Are existing safeguards adequate? If not, what would be a helpful and proportionate way to address these?
Our concerns are about access and these have been dealt with in Question Six.
- Does exception 3 and 6 (concessionary services and associations – concessions) in the proposed draft Order in Annex I adequately achieve the policy intent described in paragraphs 7.3 – 7.9 above for both service providers and associations? If not, or you are not sure, please explain why.
- Does exception 4 (age related holidays) in the proposed draft Order in Annex I adequately achieve the policy intent described in paragraphs 7.10 – 7.14 above? If not, or you are not sure, please explain why.
- Does exception I (immigration) in the proposed draft Order in annex I adequately achieve the policy intent described in paragraphs 7.15 – 7.17 above? If not, or you are not sure, please explain why.
- Does exception 5 (residential mobile homes) of the proposed draft Order in annex I adequately achieve the policy intent described in paragraphs 7.18 – 7.25 above? If not, or you are not sure, please explain why.
- Does exception 7 (sport) of the proposed draft Order adequately achieve the policy intent described in paragraphs 7.26 – 7.32 above? If not, or you are not sure, please explain why.
- Do you have any further comments about the draft Order (Annex I), over and above any comments you have already made about the exceptions it covers?
- What would you like guidance to cover to ensure that businesses and organisations are clear about what they need and do not need to do?
The guidance should have the contact details of the dedicated signposting services so businesses know where to send enquiries.
- What particular types of business or organisations do you think will need tailored guidance on how the changes affect them?
As only BIBA and the ABI will be party to the new agreement with Government to signpost there will be other general insurance sellers who sell motor and travel insurance who will need guidance. This should include how to help their customers to whom they sell insurance products by signposting and referral and how to access the dedicated call centre. Therefore government should provide guidance to banks, building societies, credit brokers, motor dealers, Lloyd’s of London, travel agents and any other FSA regulated firm who has an insurance permission as to how they should signpost/ refer and be made aware of the dedicated signpost providers.
- What do you see as the best way to communicate this guidance to businesses and organisations? Where would you normally go for guidance on discrimination law?
Guidance should be provided on government websites like Business link, GEO and Treasury websites. Also bodies like the CBI, Trade Associations like ABTA, and consumer bodies like Which? And the Citizen’s Advice Bureau and regulatory related firms like The Money Advice Service and the FSA/ FCA.
- Can you provide any data on costs and benefits, which have not already been included in the impact assessment? Do you have any comments on the assumptions or estimates we have made? Please give details of the sector (s) to which you are referring.
BIBA can operate the dedicated signposting service on a neutral cost basis and it is fully scalable. The service is paid for by our members. BIBA is a not for profit trade association.
- Can you provide any further information or views to help us calculate the economic benefits of reducing discrimination? Please give details of the sector (s) to which you are referring.
- Does the equality impact assessment properly assess the implications for each of the equality target groups? If not, please explain why.
Thank you for considering our response, if you would like to discuss any of the above comments in more detail then please contact me and we will be happy to discuss further.
Graeme Trudgill ACII
Head of Corporate Affairs
0207 397 0218