People of colour may face ‘ethnicity penalty’ on car insurance in England

theguardian.com:

Hundreds of thousands of people of colour may be paying an “ethnicity penalty” of at least £280 a year each in higher car insurance costs, an investigation by Citizens Advice has claimed.

The national charity said its year-long investigation had uncovered a “shocking trend” of people of colour paying a lot more for motor cover than white people, and that the penalty was up to £950 in some locations.

However, the main insurance industry trade body disputed the report’s conclusions, saying insurers “never” used ethnicity as a factor when setting prices.

Working with the research agency Europe Economics, Citizens Advice carried out 649 mystery shops for car insurance quotes using six different customer names across eight postcodes in England. The aim was to compare areas with a high white population with those where there was a high proportion of people of colour.

The charity estimated that 754,000 people of colour held car insurance policies and lived in areas affected by the alleged ethnicity penalty.

Citizens Advice said it found that in some areas “the difference in price was more than 100%,” and that common risk factors such as crime rates and deprivation levels could not account for this. “We’re concerned this suggests that areas with large communities of colour may be identified as more risky, even when objective risk factors are controlled,” it said.

It found that quotes in areas with large proportions of black or south Asian people came in at least £280 higher than quotes in largely white postcodes, but that the ethnicity penalty was “up to £950 in some places”.

In Bristol – the location of two of the postcodes – an area with a population that comprised 41% black people and 18% south Asian people produced an average quote