Women 'have grounds' to fight high premiums

The Human Rights Commission says women who cannot afford income protection insurance because the premiums are twice those for men have grounds to complain on the basis of indirect discrimination.

As take-up of income protection insurance rises, it has emerged that women pay about double for the products because they make many more claims than men.

In particular, women make a greater number of mental health and stress-related claims which are costly because they run for longer.

It is likely that some women are put off by the expense, financial advisers say - a non-smoking 50-year-old female insuring a $65,000 income will pay around $270 a month, compared with $129 for a similar male.

Chief Human Rights Commissioner Rosslyn Noonan said that although the law allowed insurers to set different premiums on the grounds of age, disability and gender, the latter was often too crude a basis on its own as a means of assessing the cost.

"Insurers should consider whether claims that are incurred more by women than men are fairly and robustly weighted against those incurred more often by men."

She said a woman who believed the higher premiums were a barrier to her taking up the insurance could complain to the commission on the grounds of indirect discrimination.

"We would take a complaint of this nature seriously."

The commission says indirect discrimination occurs when an action or policy that appears to treat everyone the same actually has a discriminatory effect on a particular group, unless there is good reason for it.

All insurance companies the Herald spoke to confirmed that premiums were higher for women because of their level of claims.

The situation appears to be long-running and common across a number of countries.

A British study in the mid-2000s showed that between 1991 and 2002 women made significantly more claims on their income protection insurance than men.

The report by a research group of the UK Actuarial Profession showed that the difference was most pronounced in middle age. Between the ages of 40 to 50 women claimed almost twice as often as men.

Women aged 40-44 made almost three times as many mental health claims as their male counterparts. However numbers of claims from middle-aged women for musculoskeletal conditions, neoplasms, arthritis, genito-urinary problems and other diseases were also higher than those from men.

Meanwhile males claimed more for injuries, particularly young men. Apart from the over-60s the only age group in which men exceeded women for numbers of claims was the under-30s.

General manager of customers and markets for insurer Sovereign, David Drillien, said the company was in the process of doing some work on why women cost it more.

One factor was the proportion of accident claims from men - injuries tended to heal faster than diseases and the cost was also offset by Accident Compensation entitlements.

He said women made more claims for conditions like depression, but "it's not as simple as the amount of depression men and women suffer. At the end of the day we just look at how much it costs us."

Financial adviser Liz Koh said women were underinsured compared with men.

For single women in particular the biggest risk was usually losing the ability to support themselves.