Race Tax: This Is How Ethnic Minorities in Britain Pay Extra Insurance Fees

People of color and other ethnic minorities face entrenched racial discrimination in Britain in many aspects of life, according to many report and studies.

An investigation by the British legal organization Citizens Advice has revealed that car insurance companies are charging ethnic minority drivers more than White drivers.

The organization that provides free legal advice to citizens across Britain, exposed the "shocking trend" of insurance companies pushing the ethnic minority drivers to pay hundreds of pounds a year more than their White peers.

This conclusion was reached after a year-long investigation, which included an analysis of 18,000 cases of people who requested legal assistance from the organization in England and Wales. People from ethnic minorities pay an average of £280 more than their White peers, regardless of gender, age or income.

 

Race Tax

Citizens Advice conducted the experiment on a number of regions using postal codes. It found that in areas where the proportion of the population of ethnic minorities is more than 50 percent, according to official statistics, the cost of insurance has increased by about £280 per year, although other personal data remains, such as age, occupation, gender, vehicle and accident history, unchanged (i.e. only home address differed).

The risk factors such as: crime rate, deprivation, traffic accidents, and population density in an area, did not have a role in the different cost of insurance.

The organization called on the responsible government body to monitor the conduct of financial institutions (FCA) to ensure that no one pays what it called a "race tax" in the insurance market, requesting the commission to intervene to ensure that companies comply with the equality law.

The Independent quoted a spokesperson of the FCA who praised the organization's work "on this important issue.” Noted that insurance companies' use of personal data to determine risk factors and then set prices should not lead to discrimination based on elements of personal identity, such as race.

On his part, James Dalton, director at the Association of British Insurers for general insurance policies, said: "Insurance companies do not use absolutes of racial background as an element in setting prices, and our members are bound by the law of equality.”

Dalton emphasized that ethnic background is not among the risk factors that companies take into account in setting prices, but acknowledged that the organization's report raises important public debate.

 

Discrimination in Work Place

The Race Equality Group conducted an industrial survey to reveal discrimination cases in London city. It pointed out in October 2021 that two in three UK finance workers from Black and minority ethnic backgrounds have suffered discrimination in the workplace.

The group’s report was released after surveying 800 employees from 440 firms with more than £1.4tn in annual revenue between them; 66% of minority groups had experienced discrimination at work because of their background, 28% stressed that discrimination was blocking their career, and 48% felt their career progression was slower than for White colleagues.

While 41% of them believed that their employers did not create an inclusive environment, the second half stated that they felt their supervisors were truly committed to respect differences because diversity was critical to the future success of the business.

 

Different World

An independent charity group RSA conducted a survey of 2,600 people in UK, including 1,000 people from ethnic minority backgrounds, found that: “Discrimination in local services is twice as high among ethnic minorities: 52% of Asian and 50% Black respondents have faced discrimination when accessing local services—compared to 19% of the White population.”

While 25% of the Black believe that the UK police, justice system, and the UK government were unsupportive, 20% of Mixed populations believe that the police ‘actively make my life more difficult’, compared to just 9% of White respondents.

When considering how well the police and justice system operates, 42% of White respondents said that the police ‘do their job’, while Black and respondents and those of mixed ethnicities were the most likely to say that they need improvement.

The BBC published a report, showing discrimination in the areas of work, housing, salaries and criminal justice. The report provided a "disturbing" picture of the reality in Britain. For instance, Back college graduates earn 23.1 percent less than their White counterparts. Unemployment is spread at higher rates among ethnic minorities.

David Isaac chair of the equality and human rights commission, said the report reveals a deeply disturbing combination of the rise in hate crime that emerged after the Brexit referendum, and long-standing and systematic racial discrimination and injustice.

He warned that everyone must redouble efforts to urgently confront racial discrimination, otherwise the UK risks the growth of division and the increase of racial tension.

"If you are Black or from an ethnic minority in modern Britain, it can feel like you're still living in a different world. The report reveals the extent to which racial discrimination is entrenched and permeated."

From another side, a report on Islamophobia published in September 2022 revealed that British Muslims have been categorized as being one of the most discriminated communities across the UK.

The University of Birmingham and data analysis firm YouGov said that: “The British community is more likely to hold discriminatory and negative views on Islam than on any other religion and a significant minority of this population hold incorrect and conspiratorial views on British Muslim communities.”

 

Discrimination’s Impact

The journal Ethnicity & Health published a research study on 1106 people of White and Black skin, and the result was that exposure to racial discrimination in early childhood and adolescence is associated with an increased risk of cardiovascular diseases during later life, such as arrhythmia and high blood pressure.

On the biological level, the body reacts to the long-term psychological stress resulting from racial discrimination in a way that makes the cells of the body age prematurely, the body’s immunity decreases, and the chance of infection increases.

Another study that began in 1997 and continued until 2011, with 38,142 African–American women who were exposure to racial discrimination on a daily level, such as poor service when buying from the store. The study result showed a strong link between exposure to racism and asthma.