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How millions can be raked in with prejudice

If an elderly person builds a car accident, the question of how to prevent older people from driving in the first place is discussed. They are seen as a particular danger to road transport because they can no longer see and hear enough, react too slowly and are no longer able to concentrate on different things at the same time. And so it is no surprise to anyone that older people have to pay higher basic contributions for their liability insurance.

“We know that a factor in the development of claims expenses is also the age of the policyholder. What we mean by this: The relevant statistical documents show that the risk of accidents varies in the life cycle. It is highest among young beginners, then decreases continuously, but starts to rise again very slowly from about the middle of 40. From the age of 60 onwards, the damage figures will increase significantly again.”

The sums involved will probably only become clear if you are one of those who are asked to pay accordingly. The online consumer magazine “Finanztip.de” writes: “It is possible that a 75-year-old person has to pay almost 40 percent more for his policy than a 55-year-old. (…) “We have found that car insurance costs more for some providers from the age of 60.” 65-year-olds already pay up to 12 percent, depending on the insurer. For 70-year-olds, car insurance costs around 20 percent more for some providers than for 55-year-olds in the same fare. From the age of 75 it gets really expensive: Here, some providers charge up to 37 percent surcharge.”

Even those who rent a car often have to pay significantly more in old age. Or don’t get a car at all.

The insurance industry relies on statistics: “As a glance at official accident statistics shows, younger and older drivers are comparatively often the main cause of accidents. The GDV’s motoring statistics, based on approximately 100 million insurance contracts, also confirm that older drivers cause comparatively more damage on average than middle-aged drivers – so with age, the frequency of claims increases.”

A graphic by the Federal Statistical Office, presented by the Association of the Insurance Industry, fits in with this. According to the image of a tub, the proportion of those who cause a car accident with personal injury mainly until they are between 45 and 50 years old decreases. From then on, things are going uphill again: 70 percent of accidents involving personal injury are blamed on people who are 75 and older.

How millons of peoble can be won over with prejudicses

The course of the bend is very memorable and confirms what most motorists believe.

In fact, the graph does not say whether car contributions are rising in old age. The graph shows that older people are more likely than younger people to cause accidental damage. But they do so primarily as pedestrians and not as motorists. This is not the case with accidents caused by the elderly by car, but by all the accidents that they cause. This assumes that the car is handled, which does not take place at all. The Scientific Service of the Bundestag does not consider this to be age discrimination, but follows the conclusion of the German Insurance Association (GDV) that “older drivers cause on average more damage than middle-aged drivers.”

This is despite the fact that there is other evidence: The ADAC notes that, contrary to popular belief that older motorists aged 65 and over cause above-average and serious accidents, the 2017 accident statistics show that only 16 percent of accidents involving personal injury were caused by seniors in the year, even though they accounted for 21 percent of the total population. For the ADAC, it is also clear that “due to their increased self-vulnerability, seniors are more likely to be at risk than at risk. This is especially true for older road users who are travelling as pedestrians or cyclists, because in the event of an accident, the risk of injury increases significantly here. Almost one in two pedestrians or cyclists who have died on the road is older than 65 years of age.”

Thorsten Buchmann of the Road Safety Council argues similarly: “Public perception often misfigures beyond the federal office’s statistical figures. If you take a closer look, you can see that only about 13 percent of all people involved in accidents are over 65 years of age at all, with a population share of about 21 percent. We actually have a disproportionate participation in accidents here, but a disproportionate hazard because one in three people killed on the road is over 65 years old.”

The statistics therefore do not provide a plausible reason for the above-average insurance premiums that older people have to pay. The online consumer magazine Finanztip states clearly: seniors pay too much, because they are not over-proportionately involved in accidents, but under-proportionately. However, it is not recommended to those affected to take action against it, but to look for low-cost insurance. Why only?

There are many answers to this question. Above all, however, it is possible to deceive and manipulate with simple graphics and figures. And even if these deceptions and manipulations are exposed, there is no need to fear that older people will cancel their insurance too quickly, as this is not possible without effort. It may be understandable and understandable that consumers are reluctant to change insurance. But not that the media accepts discrimination against people because of their age, and thus a violation of the law. This is particularly irritating when media – such as the online magazine Finanztip – say that they want to empower consumers. Since it is easily possible to show, for example, with the figures of the ADAC that older people are discriminated against here, it must be noted that it is due to the fear of the media to get involved with powerful people – and potential advertisers and thus financiers.

Manipulating with statistics

In this context, the association of the insurance industry as a whole is particularly powerful. Exploiting this power, he not only misinterprets statistics, but actually manipulates them. The association writes in its brochure How age affects the motor insurance contribution on the question of how to explain how the association’s accident statistics differ from the accident statistics of the Federal Statistical Office: “Differences from other statistics result essentially from the fact that the statistics of the GDV also record minor sheet metal damage and damage without police recording. In addition, the GDV statistics also deal with the amount of damage that cannot be recorded in the accident statistics of the Federal Statistical Office.”

That may be the case, but it does not explain why the figures published by the association itself do not prove what is claimed, as the view of the group of 42- to 62-year-olds and the group of 63-67-year-olds and the way they are conducted in the statistics shows: in 2016, 18 million insured persons were between 42 and 62 years old. They thus accounted for the largest proportion of insured persons. More than 930,000 caused damage of 3.158 billion euros, an average of 3,394 euros per claim. Of all insured persons in this age group, 5.2% caused an accident.

Of the 63-67 year olds, 5.3% took out their insurance in 2016. At the same time, the average amount of damage fell to EUR 3,067 or caused damage of around EUR 564 million to this age group of a total of 3.3 million motorists.

If one starts from the question of the high risk for the insurance that, depending on age, a driver causes higher damage, one can divide the number of drivers belonging to this group by the amount of damage they cause.

For 2016, this amounts to a sum of 176 euros for the 42- to 62-year-olds and 171 euros for the 63- to 67-year-olds. For 2017, the figure is 173 euros for the younger generation and only 164 euros for the older ones.

Apart from the fact that the amount of damage per insured event appears to have decreased, it turns out that the older ones cause less damage than the younger ones. It is therefore perhaps no wonder that no new statistics have been available to date. The Office against Age Discrimination complained about this back in September: “At the beginning of September, more precisely on 6 September 2019, no annual Community statistics on the history of claims in motor vehicle liability insurance have been published on the BAFIN website.” And the office also criticizes: “The fact that the umbrella organization of private insurance companies produces these statistics is not laid down in the law.”

Moreover, it is not stipulated that the statistics are based solely on the age of policyholders, which leads to a disadvantage for older people. The statistics do not show age, but a “differentiated user age”. It is assumed that the policyholder does not drive his car alone, but that it is also used by other adults in his household: “Each combination of the youngest user’s age and the age of the policyholder is assigned exactly one age group for the differentiated age of use. The age of the youngest user or policyholder, which belongs to the age group with a higher demand for claims, is decisive.” In other words, there are no statistics that only take into account the age of a policyholder. This is not to say how much older people have as drivers of a car in road accidents.

Mathias Zunk of the Association of the Insurance Industry did not wish to comment on these contradictions in the publications of the insurance industry.

The statistics are also problematic because they are based on figures that have not been updated: since 2003, the Federal Insurance Inspectorate has not published any information on the actual expenses of motor insurance for claims settlement. In addition to the age of the car user, the statistics of the Federal Financial Supervisory Authority show a number of damages and specify the total sums spent on damages. However, this figure cannot describe the actual damage, because it also takes into account the provisions, i.e. the money that insurance companies set aside in order to be able to pay future damages. This is not taken into account in the invoice above.

Gerhard Wollank, professor at the University of Applied Sciences Cologne, confirms that the insurance companies do not calculate the rates for older people according to their driving behaviour or the damage they cause, but independently. According to Wollank, this can already be seen in the graph, which is evident due to the tariff developments: The curve makes jumps, even though it would have to be straight. Gerhard Wollank writes: “Most car insurance companies charge the same amount of premiums for car owners aged 25 to 60 and charge premiums only for those under 25 and over 60. In my opinion, this is wrong and is contrary to the principle of equal treatment. (…) Insurance companies are not allowed to “calculate” the old-age supplements expressed as a percentage.”

Weighing

There is a General Equal Treatment Act and a Federal Anti-Discrimination Body, to which anyone can turn. However, in order to demonstrate that an older motorist is discriminated against because the rates of motor insurance for seniors are higher than for other age groups, without statistics being able to justify it, it is necessary that the basis for calculating insurance is available. Since these are not open, there is a conflict of interest which has not been clarified by the legislature and must be resolved in court. But an adviser to the federal anti-discrimination body says in a letter:

“Unfortunately, from an anti-discrimination point of view, there is little that can be done if car insurance companies increase premiums on the basis of age, regardless of the driving behaviour of policyholders. Although this practice certainly leads to unfair results for individuals, it does not regularly infringe the General Equal Treatment Act (AGG).'

According to the adviser, the General Equal Treatment Act allows private insurance companies to treat older insured persons differently “if this is based on recognised principles of risk-appropriate calculation. This shall include, in particular, actuarial risk assessments using statistical surveys.”

It is legitimate for insurance companies to rely on statistics on increased accident rates among older motorists. ‘If this data is available, a typically increased risk may be presumed which can be invoked against the individual policyholder irrespective of the individual policyreport. The validity of the corresponding statistics is generally assumed by the case-law and typing is permitted for reasons of administrative practicality and a method recognised in practice. In our opinion, therefore, legal action does not seem to be very promising.”

The reference to the fact that insurance companies would rely on statistics requires an examination of whether the statistics relied on are also correct. In another letter, the phrase “increased accident figures” was also retracted: “It is not an increase in the absolute number of accidents, but an increased loss caused by older motorists and motorists, as they cause on average more damage than middle-aged drivers.” The absolute number of accidents is not higher for older motorists, but only the average cause of damage in accidents involving older motorists."

This is neither statistically correct nor does the Association of the Insurance Industry express itself accordingly. Instead, the association claims that older drivers actually cause more damage. The term the average claim obscures this, because it makes a difference whether more damage is caused or a higher amount of damage.

The legislator

Nevertheless, the HUK sees itself in the right and refers to the question why internal price calculations are not disclosed on competition grounds: “We ask for its understanding that we, too, cannot behave differently for reasons of competition, since the tariff calculation in car insurance is a major competitive factor. In addition, we are not legally obliged to disclose our individual contribution calculation.”

And the Association of the German Insurance Industry states that only its member companies receive information on statistical data, but not individual insured persons.

The legislator has created a legal problem here. Christian Armbrüster, professor of private insurance law, formulates the problem in an opinion written for the Anti-Discrimination Office:

‘The legislature has not resolved the conflict between the policyholders’ interest in disclosure with regard to the internal internal data relevant to unequal treatment, on the one hand, and the insurer’s legitimate interest in the confidentiality of such internal sines on the other.’

The conflict left open by the legislature is the contradiction between the legitimate interest of the insured in disclosing the data and the interest of the insurance industry in the confidentiality of the data.

However, it cannot be examined whether or not there is discrimination in the absence of disclosure of the data. It is true that the calculation of premiums is not regulated by law. This does not mean, however, that the insurance industry is entitled to arbitrarily design tariffs in a ‘coordinated behaviour’.

In the aftermath, the dispute must be resolved in court. In his view, it could also be solved by “checking the insurer’s internal data by a neutral, confidential body.”

It would also be possible for the Federal Financial Supervisory Authority to cease to perform a similar function to that of the Federal Office of Transport: namely, simply to take over the information provided to it by those who were supposed to control it. This might require a simple law – but this requires a political interest in transparency. It remains to be seen whether this interest will develop in the near future.