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Colliding Interests – Age as an Automobile Insurance Rating Variable: Equitable Rate-Making or Unfair Discrimination?

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  • Robert Brown
  • Darren Charters
  • Sally Gunz
  • Neil Haddow

Abstract

Many private business relationships are increasingly characterized by claims that certain actions should not be permitted since particular right claims are involved. Such claims should be taken seriously, but are they always ethically legitimate? This paper analyzes one context, the use of age as a rating variable in the pricing of automobile insurance, where such claims are made. By identifying, evaluating and assessing the relevant basis for the differentiation, actuarial equity, it is concluded that there is an ethical basis for such a practice. The analysis also provides an equivalent means for considering other such analogous claims where actuarial equity is involved. Copyright Springer Science+Business Media, Inc. 2007

Suggested Citation

  • Robert Brown & Darren Charters & Sally Gunz & Neil Haddow, 2007. "Colliding Interests – Age as an Automobile Insurance Rating Variable: Equitable Rate-Making or Unfair Discrimination?," Journal of Business Ethics, Springer, vol. 72(2), pages 103-114, May.
    • Handle: RePEc:kap:jbuset:v:72:y:2007:i:2:p:103-114
    DOI: 10.1007/s10551-006-9160-z
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    References listed on IDEAS

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    1. Giavazzi, Francesco & Spaventa, Luigi, 1990. "The `New' EMS," CEPR Discussion Papers 369, C.E.P.R. Discussion Papers.
    2. M. Shannon & D. Grierson, 2004. "Mandatory retirement and older worker employment," Canadian Journal of Economics, Canadian Economics Association, vol. 37(3), pages 528-551, August.
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    Cited by:

    1. David A. Cather, 2020. "Reconsidering insurance discrimination and adverse selection in an era of data analytics," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 45(3), pages 426-456, July.
    2. Casper H. de Jong, 2021. "Risk classification and the balance of information in insurance; an alternative interpretation of the evidence," Risk Management and Insurance Review, American Risk and Insurance Association, vol. 24(4), pages 445-461, December.

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