Gender ruling to change insurance premiums

ECJ rules that insurers can no longer charge premiums based on the gender of applicants.

By James Preston Published 01 March 2011

Insurers can do longer let gender be a factor in the price they charge for their premiums, following a ruling by the European Court of Justice (ECJ).

The court ruled that male and female applicants must be treated equally from 21 December 2012, following a challenge by Belgian consumer group Test-Achats.

It was previously common practice for car insurers to charge lower premiums for women than men; a practice that the ECJ felt was a contradiction of European principals of gender equality.

The ruling also means that the cost of buying a pensions annuity will change.

The ruling has been criticised by the British Insurance Brokers' Association (BIBA) and AA Insurance, as the cost of the average car claim by men is significantly higher than those by women.

AA Insurance's Simon Douglas told BBC News that the ruling will effectively mean women are subsidising male insurance premiums.

"We could see their prices go up 25-30% and men's premiums could fall by about 10%," said Douglas.

There will also be an effect on the cost of the pensions annuity, with the longer lifespan of women meaning they receive a smaller annual pension than men.

The ruling would mean men would receive a smaller annuity to create equality with women, possibly leading to significantly reduced pension incomes.

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4 comments

Tue, 2011-03-01 18:14 — Alex, London (not verified)

There is a basic misunderstanding of the ruling (which stems from a 7 year-old directive) and its meaning for equality in my view. Too long to explain. If you're interested read my article. Thanks.
http://sturdyblog.wordpress.com/2011/03/01/higher-premiums-are-a-small-p...

Tue, 2011-03-01 19:03 — markcobley

You raise some good points Alex, but I disagree with you on the pensions annuity aspect. This is an odd case where sex discrimination is actually fairer, in my view. If you're interested, please read my blog http://bit.ly/e3HaRl

Tue, 2011-03-01 21:28 — Reginald-Fah-fah

This discrimination against males needs be to stopped. I'm a male driver with two motor insurance policies with over 14 years protected bonuses. I have always had a clear UK driving licence and have not made any insurance claims. I'm an 'Insurance Expert' and still feel that I'm paying to much for my insurance policies due to the fact that I'm treated less favourably because of my sex.

Tue, 2011-03-01 21:41 — Alex, London (not verified)

Interesting blog Mark. I understand what you're saying. I insist however that one cannot make exceptions. Equality, de facto, must be applied uniformly, otherwise it means nothing. Otherwise one must argue the pros and cons of equality in each scenario and say: here it would be fairer to have it, here it wouldn't. And who decides that?