A new ruling means that insurers can no longer take gender into account when calculating your premiums. But what will this mean in practice – will you be better or worse off – and is it a fair decision?
Today, the European Court of Justice has ruled that insurers won’t be able to base premiums on the gender of policyholders.
At the moment, insurers can take gender into account providing they can justify it on the basis of risk analysis and claims statistics.
But the new ruling means that from December 2012, insurance providers will no longer be exempt from a wider EU principle covering gender equality. Until then, insurers can continue to charge men and women different premiums providing they can ‘ensure that the underlying actuarial and statistical data on which the calculations are based are reliable, regularly updated and available to the public’.
The gender gap
So what does this all mean to you and me? Today’s ruling could see men or women paying more or less, depending on the product they’re seeking to buy.
Take an example: women tend to get a worse deal on pensions as they have a longer life expectancy. As a result of the ruling, their annuity income would rise, while it would fall for men.
But women could find themselves worse off when it comes to car insurance. Currently, young male drivers pay more for car insurance as they’re involved in more accidents and claims than young women.
A ‘disappointing’ ruling
Maggie Craig of The Association of British Insurers, which represents the majority of insurance providers, has called the ruling ‘disappointing’:
‘This gender ban is something the UK insurance industry has fought against for the last decade. The judgment ignores the fact that taking a person’s gender into account, where relevant to the risk, enables men and women alike to get a more accurate price for their insurance. Insurers will now study this judgment carefully to manage negative effects for customers.’
The ruling doesn’t come into effect until the end of 2012 so you shouldn’t see any immediate change to your insurance premiums.
We’ll be keeping a close eye on insurers to make sure that they don’t use this as an excuse to raise prices across the board. But what do you think of these rulings – are they fair? Do you think you’ll be better or worse off as a result?
Should insurers take gender into account?
Yes (74%, 344 Votes)
No (26%, 121 Votes)
Total Voters: 465