If the discrimination is inadvertent, insurers should be able to find the data point that could be skewing models and remove it or lessen its impact.
But it’s still not clear what exactly may be twisting models, especially as different insurers plug in different data.
The sector says it’s happy to investigate. A spokesperson for the Association for British Insurers (ABI) says the industry is willing to dig deeper into “how wider societal issues might affect insurance costs.”
“Beyond accident and crime rates, several factors including road type, traffic system designs, traffic density, types of vehicles in the area and local repair prices will contribute to the cost and severity of claims,” said the spokesperson.
“I would expect insurance companies would be keen to do all they can to refine their input data sets using more granular data to ensure discrimination is removed in their pricing,” said Conservative MP John Glen, a former City minister who now sits on parliament’s Treasury Committee.
Labour’s headache
In the meantime, Labour is pressing ahead with its manifesto pledge to “tackle the soaring cost of car insurance,” which has shot up by 21 percent since June 2022.
