Making life insurance fairer for the LGBTQ+ community

For many LGBTQ+ Australians, engaging with insurance companies has not been a positive process. Almost half (47%) of LGBTQ+ people have faced discrimination or exclusion when applying for a variety of insurance products, according to a recent study by the Victorian Pride Lobby, co-sponsored by Zurich. ¹

The reported incidents ranged from being misgendered right up to being denied insurance cover. Those negative experiences were most common for individuals who identify as trans and gender diverse, have a variation of sex characteristics, people living with HIV, and sex workers.

The study also found that 41% of respondents, particularly people living with HIV, were reluctant to make an insurance claim because they feared they’d experience discrimination and stigma. In effect, they were paying for an insurance policy they were reluctant to use.

Zurich wants to help change that experience for LGBTQ+ people. We’re committed to making our insurance products fair, transparent and accessible to as many people as possible.

What does discrimination look like?

While 60% of the study’s LGBTQ+ 500 respondents said they’d found insurance companies generally helpful and supportive, many felt the processes and assumptions used by insurers were unfair to LGBTQ+ people.  

This included applying for life insurance where applicants are asked questions about their health, including pre-existing medical conditions, their work, pastimes, drug use and personal life. (Insurers do this to assess the risk of insuring a particular individual.)

Specific examples of discrimination people reported to the study included:

• being asked intrusive or insensitive questions about their sex life when applying for insurance cover or when making a claim
• having difficulty updating their details or self-declaring their gender with insurers
• having an insurance claim rejected for discriminatory reasons or without a sufficient explanation.

These sorts of negative experiences have contributed to a lack of trust towards insurers among the LGBTQ+ community – and that’s why we at Zurich are working to improve our processes.

Are insurers allowed to discriminate?

Australia’s Sex Discrimination Act 1984 mean insurers cannot unfairly treat customers based on their gender identity, sexual orientation, or sex characteristics.

However, it is not unlawful for insurers to discriminate based on sex when offering an insurance policy and the terms and conditions of that policy, if that discrimination is based on actuarial or statistical data that is reasonable to rely on.²

Life insurers typically charge higher premiums to smokers, for example, because they are statistically more likely to suffer from serious illness than non-smokers. Premiums for life insurance also tend to increase as you get older, based on the higher incidence of serious medical conditions.

Making these distinctions helps make life insurance fairer, as people who are statistically more likely to claim on a policy pay more than lower-risk customers.

But many in the LGBTQ+ community say they have been unfairly discriminated against through decisions based on out-of-date data and wrong assumptions, the Victorian Pride Lobby survey revealed.

What is Zurich doing about this?

At Zurich, we want to improve what we offer members of the LGBTQ+ community. To start delivering on our promise, we’ve brought in the following initiatives:

• launching our online LGBTQ+ Hub
• updating our processes so customers can record their affirmed gender on their policy
• updating our underwriting guidelines to enable trans and gender-diverse customers to apply in the gender that best suits them
• improving the way we assess personal risk for people living with HIV and their eligibility for life insurance cover
• removing HIV exclusions from legacy products
• using inclusive language and imagery to reflect our diverse customer base
• training our teams to deliver inclusive service.

We’re planning more initiatives and will continue to work with our peers to improve practice across the industry.

If you would like to find out more, visit our LGBTQ+ Hub.
 

The Victorian Pride Lobby survey, Worth the Risk: LGBTIQA+ experiences with insurance providers, was released in June 2022. It was commissioned by the insurance industry's InterInsurance Group, LGBTQ+ insurance industry employees and allies from 15 companies. It surveyed 500 LGBTQ+ people about their experience of insurance products including life, health, car and vehicle, travel, business, home building and contents.