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The Actuary The magazine of the Institute & Faculty of Actuaries

Actuaries and astrologers

An insurer’s bid to charge people with low-risk star signs less for car insurance has proved a commercial flop – even though it is unlikely to breach EU law, financial services commissioner Frits Bolkestein has revealed. He was responding to a call to investigate the legality of the move by French insurance firm L’Equité, which offered discounts to Cancerians, Aquarians, and Leos because they are deemed to be safer drivers.

The Commission had learned that only 300 or so customers had signed up to the offer of cheaper insurance and that the firm is about to scrap the plan. Nevertheless, the commissioner said the idea ‘used mainly for advertising purposes’ was unlikely to breach EU rules. ‘The Commission believes that in an efficient insurance market the role of the actuarial techniques in the assessment of risks should in no way be replaced by or based on astrology criteria’, Mr Bolkestein said. ‘However’, he added, ‘it should be noted that the community legislative framework for financial services in general and insurance in particular is based on the principle of freedom of tariffs. Insurance undertakings should freely assess their risks and fix their premiums in a competitive market, in accordance with community law.’

(Older readers will remember that a judge in Britain once referred to actuarial evidence in personal damages litigation as being as useful as that of an astrologer!)