How Gender X affects auto ratings for insurers

Public auto insurer Saskatchewan Government Insurance (SGI) is the latest insurer to offer auto insurance clients the choice of no sex (blank) designations.

The change will not affect SGI Canada customers in Saskatchewan, since gender or sex designation is not used as a rating factor for auto policies, Heather Hubic (Anderson), a media relations communications consultant for SGI tells Canadian Underwriter.

“Sex is not used to determine the cost of registering vehicles by the Auto Fund, so this change will not impact Auto Fund customers,” Hubic says. “In Saskatchewan, SGI Canada does not use gender or sex designation in rating for an SGI Canada Auto Pak or SGI Canada commercial auto policies, so this change will not impact SGI Canada customers in Saskatchewan.”

SGI is the latest insurer to take into account non-male or female-specific designations. Late last year, The Dominion of Canada General Insurance Company (part of Travelers Canada) said it will start applying female rates to Nova Scotia auto clients who identified as Gender X (unspecified). In 2020, Pembridge Insurance Company and TD Insurance Group started taking Gender X clients into account in their Nova Scotia auto rating criteria.

In the Saskatchewan example, residents will be able to request that the sex field on drivers’ licences and SGI-issued photo identification be left blank, SGI says in a press release. The blank sex designation, which came into effect Feb. 22, indicates no sex has been specified for the customer. This is in addition to the indicators available of “M,” “F,” or “X” (unspecified). In the week that the blank sex designation came into effect, seven people have opted for the blank sex designation on their Saskatchewan licence, Hubic says.

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Penny McCune, chief operating officer of SGI’s Auto Fund, says the option to have the no sex designation is part of SGI’s commitment to inclusiveness.

The option will be available for all customers of any age upon request, and no documentation will be required to remove the sex designation. There will be no charge for making this change to a driver’s licence or photo identification card; customers simply need to visit a motor licence issuer and request the change.

SGI did caution that it could not guarantee that a Saskatchewan-issued driver’s licence or photo identification card with either the “X” or no sex designation will be accepted by other organizations, in Canada or internationally. Customers who request the removal of sex designation on SGI documents will be informed of these considerations.

In the case of The Dominion, the Nova Scotia Utility and Review Board (NSURB) approved in November 2021 the insurer’s application to change its rates and risk classification system for private passenger vehicles. The Dominion says it will start applying female rates to Nova Scotia clients who identify as Gender X.

“The female rates are generally lower than male rates for the same driving and vehicle characteristics,” NSURB member Jennifer Nicholson wrote in a Nov. 19 ruling. “Dominion does not have any risks currently identifying as ‘Gender X.’ As a result, the proposed change has no immediate impact, and no off-balancing is required.”

Pembridge rates motorists identifying as Gender X in Nova Scotia as women. In that same province, TD Insurance Group — which includes Security National Insurance Company, Primmum Insurance Company, and TD Home and Auto Insurance Company — takes the average of what Gender X drivers would have paid had they been male and what they would have paid had they been female.

“Rather than taking the approach of charging the lowest rate, the TD blending approach is replicating, to some degree, the premium that a rating algorithm without gender would produce,” says an April 2020 decision from NSURB. “If gender were removed, the experience of both male and female operators would be aggregated, and the combined experience data would be used to develop required premiums.”

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