Institute and Faculty of Actuaries and Fair By Design Issues Report Entitled 'The Hidden Risks of Being Poor: The Poverty Premium in Insurance'

LONDON, England, Oct. 9 (TNSRep) -- The Institute and Faculty of Actuaries and Fair By Design issued a 36-page report in September 2021 entitled "The Hidden Risks of Being Poor: The Poverty Premium in Insurance."

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TABLE OF CONTENTS

About Fair By Design...1

About the Institute and Faculty of Actuaries...1

Executive Summary...2

Stakeholder engagement...7

Foreword by Liz Barclay, Chair, Fair By Design Steering Group...8

Foreword by David Heath, Chair of the IFoA Policy Advisory Group...10

The poverty premium in the insurance sector...12

* The poverty premium and protected characteristics...13

* Lived experience of the poverty premium...14

- Complex or opaque products...14

- Penalties for paying monthly...14

- Loyalty penalties...14

- Unaffordable premiums or refusal and perceived disadvantage...15

Increasingly individualised risk...16

* The great risk transfer...16

* Positives and negatives of individualised risk pricing...16

* Transparency for the consumer...17

* Pooled versus individualised risk...18

Fairness in insurance...20

* The regulator and 'fairness'...21

Insurance pricing and the Equality Act 2010...23

The role for government...25

Products to address the poverty premium...26

- Ending the monthly payment premium...26

- A government-agreed reinsurance scheme - a Postcode Re or Health Re?...26

- Clearer and simple products...28

- Auto-enrolment through employment contracts...28

- Microinsurance...29

Recommendations...30

Appendix...32

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The full report can be viewed at https://www.actuaries.org.uk/system/files/field/document/IFoA_Hidden_Risks_of_Being_Poor_Final.pdf

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