Newly bereaved individuals across Britain are facing substantial increases in their insurance premiums, with some reporting hikes of up to 15% immediately after informing their provider of their partner's death.
The Human Cost of Algorithmic Pricing
Kay Lawley experienced this firsthand when she received renewal quotes from Ageas, her home and car insurance provider, shortly after her husband passed away. After informing the company of his death, her car insurance quote jumped from £301 to £348, while her home and contents policy increased by almost 12% – from £1,039 to £1,161.
"When I asked why, Ageas was unable to give me any reason other than 'that's what comes up on the screen'," she reported. This scenario is being repeated for many grieving customers, with divorced and separated couples also affected by similar premium increases.
How Insurers Justify the Increases
According to insurance providers, the practice stems from statistical modelling that views joint policyholders as less risky than individuals living alone. Ageas confirmed that joint policyholders receive a discount that is forfeited when one partner dies.
Thomas Quirke, Chief Underwriting Officer at Ageas, stated: "We understand that removing this discount could cause additional distress to bereaved customers. To prevent this, we have a specific process to ensure the joint policyholder discount is not removed when the policy comes up for renewal."
However, this process failed in Lawley's case. The company has since refunded her additional premiums and sent a bouquet of flowers, though she will lose the discount at her next renewal.
Widespread Impact and Industry Response
Another customer, Alison Roper, was told her home insurance would cost more because her property was "likely to be left less well attended" after her husband's death, despite having two large dogs.
In a particularly stark case, a widow's home and contents policy with Swinton Insurance saw the renewal quote increase from just over £200 to £641 after the company learned of her husband's death. The family eventually found coverage with another provider for £229.
When contacted by the Guardian, Swinton apologised for the distress caused and admitted their agent should have escalated the matter to their underwriting team. The company is now addressing this with staff to ensure learning and improvement.
James Daley of Fairer Finance commented: "These cases highlight the lack of humanity within many insurers' pricing algorithms. Even if there's a statistical basis, these decisions lack sensitivity – and it's worse that insurers cannot explain the reasoning because their pricing models are viewed as trade secrets."
The campaign group warns that the increasing reliance on artificial intelligence to calculate premiums is making transparency issues worse, undermining public trust in the insurance industry.
