Memorandum by The AA Motoring Trust
INTRODUCTION
The AA Motoring Trust
The AA established The AA Motoring Trust in
2002 to create a single charity through which its historic public
interest work developing motoring and road safety could be focused.
In January 2003, The AA Motoring Trust became the sole trustee
of the AA Foundation for Road Safety Research and the former AA
Motoring Policy Committee stood down in favour of the new charity.
The AA Motoring Trust sponsors and undertakes
research and provides advocacy, advice and information across
the field of motoring, roads and transport and the environment.
It has special interest in social issues surrounding car use.
The charity plays a leading role in the European
Road Assessment Programme and other international collaborative
projects. The AA has gifted its public policy research to The
AA Motoring Trust to draw on as it sees appropriate.
AA Foundation for Road Safety Research Studies
on young drivers
The AA Foundation for Road Safety Research has
commissioned four reports on young drivers, which have been influential
in helping to shape policy on learning to drive, and the penalty
points sanction that is applied to all new drivers, ie a new driver
who records 6 penalty points within the first two years of driving
must re-take the driving test.
The AA Foundation studies into young drivers
are:
— Accident risk and behavioural
patterns of younger drivers (Southampton University 1991);
— "Safe and unsafe"—a
comparative study of younger male drivers (Southampton University
1992);
— Male and female drivers: how different
are they? (Reading University 1998);
— Cradle attitudes—grave consequences
(Reading University 2002).
The fundamental findings of these studies were:
— most young drivers have the skills
to drive safely, but some choose not to do so;
— young male drivers are much more
at risk than women drivers;
— attitudes are formed well before
driving age.
Copies of these reports can be provided to the
Committee.
Are women safer drivers than men?
The Department for Transport's road accident
statistics for 2002 show that men (259,856) are involved in well
over twice as many accidents as women (105,584). The number of
men injured (106,420) is nearly twice that of women (58,811).
These differences are not, however, as marked when mileages driven
are taken into account.
Men predominate in the Home Office's statistics
of motoring offences, committing 89 per cent of offences (2001).
Generally, the more serious the offence, the higher the proportion
of offenders who are male.
The insurance industry's actuarial interest
is in the cost of claims incurred per year covered, including
damage only. With this indicator, younger women's lower accident
costs mean that they pose less risk to insurers than younger men,
and this is reflected in the insurance premium. Road safety policy
is concerned particularly with personal injury accidents, and
road safety targets with death and serious injuries.
What is the impact of gender difference on risk?
A study—Male and female drivers: how
different are they?—commissioned by the AA Foundation
for Road Safety Research and carried out by Reading University
found that:
— Men and women aged 17-20 are more
likely to be involved in accidents on bends—men nearly twice
as often. This difference decreases as drivers mature and the
proportion of bend accidents is almost the same for both sexes
above the age of 35.
— Young men are twice as likely as
women to be involved in an accident when they are overtaking,
but the difference diminishes as age increases.
— Nearly half of all accidents involving
young men, and a third of those involving young women, occur when
it is dark.
— The reasons for the different types
of accidents, and for the higher fatality risk among men, was
because men drive faster, commit more driving violations, are
more inclined to drink or take illegal drugs and drive, and are
prepared to drive for longer periods without a break.
— The differences in the pattern of
accident involvement between men and women have remained remarkably
constant over the past 20 years, despite the fact that the proportion
of women drivers has increased hugely.
— In three different types of assessment—observations,
self report and video test—men consistently chose higher
speeds than women of the same age and driving experience.
— The relationship between traffic
violations and accident involvement is well established, and the
AA Foundation research, like earlier studies, found that young
men reported more frequently breaking the law than young women.
Young male drivers were more likely than any other age group to
be stopped by the police.
— Men aged 17-20 said that they had
been stopped, on average, just over 1.8 times in the last three
years, women of the same age were stopped, on average around 0.3
times over the same period.
— Men in the study group aged 30-50
admitted to drinking the most alcohol before driving, and men
generally indicated that they were prepared to drink more than
women, suggesting that there is an element of premeditation in
male drinking habits.
— Men on their own drove faster and
closer to the car in front than women on their own, but if a young
man was with them in the car, both men and women drove more dangerously.
A young woman passenger made young men drive more safely, but
made no difference to the already safe driving performance of
women.
What is the impact of gender risk on insurance
premia?
AA Insurance shows that for a standard Ford
Focus women are consistently seen as better risks on the road
than men until they reach the age of 55. But for the next 20 years,
their premiums are slightly more than men's. It is difficult to
explain the rates beyond that age—possibly because of the
low numbers of woman drivers covered.
Comparison table for male and female drivers:
|
| Age | Female(£)
| Male(£) |
|
| 17 | 2,438
| 3,806 |
| 21 | 577 |
805 |
| 25 | 423 |
489 |
| 30 | 367 |
409 |
| 35 | 342 |
359 |
| 40 | 312 |
320 |
| 45 | 294 |
298 |
| 50 | 268 |
268 |
| 55 | 258 |
253 |
| 60 | 254 |
240 |
| 65 | 265 |
240 |
| 70 | 281 |
264 |
| 75 | 366 |
367 |
| 80 | 457 |
359 |
|
Note:
The premiums are for comprehensive cover for an S reg. (1998)
1.4 litre Ford Focus CL5 door. All ages had maximum no-claims
discount (ie full premium for 17 year old, one year for 18 year
old, etc).
— Living in Cambridge (CBI).
— Five years no claims for 25 year old and above
(no NCD for 17 and 21 year old).
— Occupation is clerical/admin staff (except the
65, 75 and 85 year old—all retired).
— Car is garaged with standard security.
— Car is 1998 (S reg) value = approx £5,800.
What will the impact of the Directive be on women drivers?
A ban on gender discrimination would force UK insurers to
adopt a single pricing policy for car insurance, resulting in
higher premiums for most women drivers. Women of most ages have
long benefited from cheaper premiums than men due to the fact
that they present less financial risk to motor insurers.
Research by the AA Foundation for Road Safety Research has
consistently shown that young male drivers represent the highest
risk on UK roads and that they are six times more likely to be
killed behind the wheel than their parents. Women tend to have
a more cautious driving style and suffer less catastrophic accidents
than men. As a result, women's insurance claims tend to be smaller.
Underwriters reward this by passing on lower premiums. There is
every suggestion that women not only have less accidents than
men, but that they also have less serious, and therefore less
expensive accidents.
The key issue is whether or not using gender as part of the
insurance pricing process is perceived as discrimination. It has
been widely considered acceptable for one group to pay more for
insurance if there is sound, justifiable evidence to show that
they represent a higher risk as a direct result of their age,
gender, occupation, postal address etc. In the case of car insurance,
this allows underwriters to price on a fair basis by tailoring
premiums to customers' own risk circumstances.
If the Directive is implemented without making motor insurers
exempt, the result would be significant premium increases for
many women, who would be penalised by subsidising the premiums
for more risky male drivers by the very law designed to help them.
CONCLUSION
The UK has the safest roads in Europe. It has been a long
established principle of motor insurance in the UK to insure the
driver, and not specifically the car. By far the biggest single
actuarial factor in assessing the risk is the character, make-up
and experience of the driver, with the type of car, driver occupation
and postal address all secondary factors. The four studies of
young drivers commissioned by the AA Foundation for Road Safety
Research has shown that young male drivers are a much greater
risk than their young female peers, and that is confirmed by the
accident statistics.
Insurers reflect that element of risk in premia, which is
why female drivers pay a lower premium in the early years of their
driving. Prohibiting insurers from applying rates related to risk
would result in a statistically safer group of drivers subsidising
the less safe group.
The AA Trust supports efforts to end all forms of discrimination
where it works against fairness and equity between different groups
in society. However, the law of unintended consequences may well
be applying here in that the very group the new law intends to
help will incur greater cost.
The AA Trust believes that where actuarial data justifies
a lower motor insurance premium to a particular group that should
continue to be permitted.
April 2004
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