UK minorities pay car insurance 'ethnic penalty'

Occurred: January 2021-

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People of colour paid hundreds of pounds more in car insurance premiums than white drivers, according to UK non-profit consumer group Citizens Advice.

Citizens Advice analysed data from 18,000 people who sought debt advice from it in 2021, finding that people of colour spent an average GBP 250 more than white people to insure their vehicles, a trend that held even when researchers adjusted for gender, age and income. 

A 'mystery shopping' exercise also conducted by the group found that people living in areas with a high proportion of black or south Asian residents paid at least GBP 280 more for their insurance. 

The study resulted in accusations of racial bias, to which The Association of British Insurers responded by saying its members complied with equality laws and 'never' used ethnicity as a factor when setting prices. 

In February 2024, the BBC revealed that car insurance quotations were a third more expensive in some areas of England with the biggest minority ethnicity populations.


Country: UK
Sector: Banking/financial services
Purpose: Calculate car insurance
Technology: Pricing algorithm; Risk management algorithm
Issue: Bias/discrimination -  race, ethnicity
Transparency: Governance; Black box