Question

To ask the Minister for Women and Equalities, with reference to the report entitled Ethnic Penalties in Motor Insurance Premiums by Webber Phillips, published in July 2016, what assessment her Department has made of concerns raised in that report that some car owners may be being charged higher premiums due to their ethnicity.

The Equality Act 2010 legally protects people from discrimination in the workplace and in wider society and sets out the different ways in which it is unlawful to treat someone. There are specific exceptions for providers of financial services such as insurance companies, which allow them to use a person’s age as a factor in assessing risk and charging for their products. However, insurers are not able to use a person’s race as a factor in assessing risk and charging for their products.

The pricing of risk is a commercial decision for individual insurers, and differences in premiums reflect different insurers’ experience of claims and other industry-wide statistics. While insurers are not required by the Financial Conduct Authority to be transparent about pricing decisions, it expects firms to comply with relevant legislation, including the Equality Act 2010, and can undertake its own enquiries to better understand what the firm is doing and whether any of its regulatory requirements have been breached.