Profitable unions

The news that an insurer is to offer civil partnerships ceremony insurance, cover for same-sex weddings (see News this week), marks something of a departure for the insurance industry. The policy, underwritten by UK Underwriting, will be distributed by Travellers Protections Services. Another broker, Acumus Insurance Solutions, is also developing a product.

Has there ever before been a general insurance policy tailored especially for the gay community? Most insurers that Insurance Times contacted said they were entirely blind to issues of sexuality when issuing insurance. Whether a customer was gay or straight didn't matter; a home contents policy is a home contents policy, full stop.

If that is indeed the case, might insurers be missing a trick? Is there a "pink premium"? And if there is, why aren't insurers more keen to get their share of it?

As far as general insurance is concerned, it may be fair to say that there are fewer issues with gay men and women than other kinds of insurance policies. Gay men, for instance, have always paid over the odds for life cover since HIV changed their risk profile. But general insurance has always been sexuality-blind, hasn't it?

Not exactly, says Linda Clark, group company director of Ivan Massow, the gay IFAs. There are a lot of issues, mostly concerning a couple's unmarried status. For instance, an unmarried partner cannot sue on a travel policy for injury to a partner or even death.

Clark tells the story of a couple who tried to put one of their mothers on a motor insurance policy. But since she was not a blood relation of the policyholder, her daughter's partner, she could not go on the policy.

Some travel insurance policies bundled with current accounts provide cover for a spouse, but not for a gay partner.

There are also difficulties with home contents policies. Some insurers have difficulty processing details of gay couples. "A gay couple might have to get separate cover for the same home, simply because the insurer's computers cannot cope with the concept of a house containing two unmarried men," says Clark.

Poor perception
These are not big issues, Clark admits. And many will be resolved by the legislation to allow civil partnership ceremonies. But they are the kind of things that do make a difference to the way insurers are perceived. They must also have blotted many insurers' copybooks with the gay community.

Acumus, which is part of the Primary Group, is also alive to the problems gay men and women face. Travel insurance is a particular problem, it says.

Generally, travel insurance policies exclude pre-existing medical conditions. So someone with HIV might have trouble getting cover at all. Insurers should be sensitive to that, and try to provide cover for that section of the community, Acumus says.

There is a more general problem with financial services, according to Clark: "A lot of people are asked questions of a personal nature when getting life cover or even getting a mortgage. Some people do not like disclosing that information."

When Insurance Times contacted insurers, we were assured that there were few issues here. Norwich Union said that it had "no specific strategy or lack of strategy". Axa said it used to have a travel policy tailored to the gay community, but had since dropped it for lack of interest. And Zurich said that it did not have any specific marketing or policies in this area.

A significant market?
The move by Travellers to provide civil partnership ceremony insurance may have more to do with the fact that it has a strong presence in the marital ceremony insurance market. But others perceive that there is a marketplace here. That, at least, is the view of John Bibby, managing director of the Primary Group.

"There is a demographic there. Generally the people you are targeting tend to be higher income earners, with more disposable income, no children, a lot of international travel and properties in the centre of towns," Bibby says.

In short, cash-rich and will travel; a significant market.

Acumus is planning to offer its own commitment ceremony insurance in due course. Otherwise, its approach is more a question of being closer to the gay community and understanding its concerns, running an affinity scheme with a gay newspaper. It is an approach that Bibby hopes could prove lucrative.

It is by no means easy, he says, to approach a minority section of the community: "There's a fine line to be trod in terms of promotion. You could be seen as someone who just wants to make some money. You need to be seen as someone who is friendly and promoting the products in a friendly manner."

Will Travellers' move be followed by others? Insurers should not be scared to offer gay couples marital insurance policies; as long as there is some legal framework, the policy will be valid.

But will the industry decide that it is enough simply to offer those policies to all without modification? Or do they need to do more to try and attract this sector in British society? IT