Shabana has written to the European Human Rights Commission regarding proposals to monitor alleged indirect discrimination in the car insurance industry.

In December, Shabana met with industry professionals including the Association of British Insurers, Members of Parliament and constituents, to discuss the issue of extortionate car insurance premiums.

The industry has faced allegations of indirect discrimination against those from Black, Asian and ethnic minority backgrounds for years.

At the December roundtable proposals were put forward to test the alleged discrimination and ensure consumers weren’t paying above the odds on premiums versus claims.

In her letter to the Chair of the EHRC Shabana highlights that any discrimination in the insurance industry would be a breach of the Equality Act 2010. She explains that as the independent statutory body with the responsibility to encourage equality and diversity, and eliminate unlawful discrimination, it is the Equality and Human Rights Commissions role to protect these rights for everyone.

You can read the letter in full below.

Letter to EHRC Chair

Dear Baroness Falkner

I am writing regarding car insurance premiums and alleged endemic indirect discrimination throughout the car insurance market.

On 3rd December 2020 I convened a high-level roundtable on this issue, attended by some of affected by high insurance premiums, MP colleagues, Richard Webber from Webber Phillips, and representatives from the Association of British Insurers and the Chartered Insurance Institute.

Those present at the meeting heard constituent and MP testimonies regarding the shocking scale of alleged indirect discrimination in the industry that negatively impacts younger drivers, those from ethnic minority backgrounds, and those who live in postcodes with more diverse communities.

The EHRC has a responsibility to uphold the rights of individuals from discrimination. It is a responsibility that should never be taken lightly and any indication that your organisation is not fulfilling this duty risks undermining confidence within the very communities you are intrusted to protect. This is no truer than when you are signposted to undertake investigations into compliance with the Equality Act.

In May 2019, the House of Commons Treasury Select Committee investigation into Consumers’ access to financial services considered whether the Financial Conduct Authority (FCA) or yourselves should lead on ensuring compliance with the Equality Act. Following this report, the FCA said it would be happy to work with you on this issue. There is no evidence thy I have found that you have taken any interest in this matter whatsoever. A failure to engage harms our nations ability to uphold the Equality Act and defend the interests of minorities in the face of persecution, be it intentional or indirect.

Representatives from the Association of British Insurers strenuously denied any allegations of direct discrimination based on ethnicity when accessing the insurance market, and I support them in this claim. However, at the roundtable I restated my support for an investigation into indirect discrimination, where consumers may be paying above the odds on premiums versus claims.

At the meeting, Richard Webber outlined one particular proposal for assessing whether or not indirect discrimination is taking place in the industry. He suggested that the insurers themselves look at the ‘claims ratio’ of consumers, where they can ascertain if individuals are paying out more for their premiums versus the amount of claims. The consumers anonymised claims ratio can then be matched to ethnicity using origins software produced by Webber Phillips, which has shown consistent success in mapping forenames and surnames to ethnicity.

If the results prove that those with extraordinary claims ratios are linked to individual profiles from ethnic minority backgrounds, it would be clear that indirect discrimination exists in the insurance market. If the opposite is true, insurers will finally be cleared of any allegations of foul play. The EHRC must support activities that uphold the Equalities Act reluctance to do so would be deeply shameful.

I understand that any discrimination in the insurance industry would be a breach of the Equality Act 2010, which protects individuals from unfair treatment and promotes a fair and more equal society. As the independent statutory body with the responsibility to encourage equality and diversity, and eliminate unlawful discrimination, it is the Equality and Human Rights Commissions role to protect these rights for everyone. As such, I believe that this campaign clearly presents an interest for an investigation by the EHRC.

For too long we have seen injustices committed against people because of slow footed organisations. Every day that passes is another where the Equality Act may be failed by the insurance industry. I call upon you to fulfil your sacred duty in upholding people’s rights and working with those of us who have grave concerns regarding indirect discrimination within the insurance industry.

I would be grateful if the EHRC could look into claims of indirect discrimination in the insurance industry, and would welcome your comments about what work can be done to address this issue.

I look forward to receiving your response.

Yours sincerely

Shabana Mahmood MP

Birmingham Ladywood