Chapter 9: Age discrimination
Q59 Is legislation the most appropriate and proportionate way of tackling harmful age discrimination?
2.1 RBS Insurance does not believe that insurers undertake harmful age discrimination. We do not consider the need for legislation as proven, and do not believe it would be the most appropriate or proportionate way to tackle concerns of age discrimination in relation to insurance.
2.2 Insurance premiums reflect the probability and severity of loss on a policy. The more likely that a loss will occur, and the more severe the consequences, the higher the premium paid. Insurance pricing uses performance statistics as a base for premium charging. The ABI has published statistical and actuarial data on the use of age in pricing risk which shows that for some products, older customers present higher risks to insurers. For travel insurance, there is a direct correlation between age, poor health and claims, with older people making more frequent and higher claims, as the graphs below illustrate .