You may have heard that an EU ruling means insurers will no longer be able to use a person’s gender as a rating factor to set the price you pay for your insurance. This move has been controversial – but is it fair?
This December, insurers and annuity providers will have to stop using gender as a way to set prices on products. And generally, it’s expected to have a big impact on peoples’ premiums.
Car insurers told us they expect the ruling to hit younger drivers hardest. The consensus is that premiums will rise for young female drivers to match the 37% higher premiums that young male drivers currently have to pay. I don’t expect female drivers will be looking forward to that, particularly when they’re already feeling the squeeze.
Equality comes at a price
While the impact on car insurance premiums might be substantial, it’ll be less so for annuities. Currently, the difference in rates between men and women is only around 2.5%, and they’ll probably meet in the middle next year.
Life insurance premiums will also increase. Currently, a 55-year-old man with a £100,000 pot pays 13% more for life insurance than a woman, so women’s premiums are expected to increase by more than 10%.
Whatever happens to premiums after the rules come into place, I don’t suggest you hang your buying decisions on it. Even if you want to save money, preparing for your own circumstances is more important.
Do you think it’s fair for insurance companies to put premiums up for women to avoid gender discrimination? Would you prefer to keep the system as it is?