EU move to end gender bias in insurance policy
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The Court of Justice of the European Union has edged closer to banning insurers from using gender to price insurance policies.
The Association of British Insurers is currently poring over an opinion statement made by advocate general Juliane Kokott at the Court of Justice, which questioned whether the use of gender as a risk factor to rate policies was compatible with European human rights on gender discrimination.
The EU gender directive, published on December 13, 2004, provides for the equal treatment of men and women in the access and supply of goods and services. Countries can opt out of the directive for insurance where using gender is based on actuarial and statistical data. But this latest opinion suggests the ability for countries to opt out may be removed.
’If you take away the ability of insurers to take gender into account, that could lead to an impact on premiums’
In September, the ABI published a research paper that analyses the impact of a potential ban on the use of gender in insurance policies.
The research explains that men and women pay different premiums for life insurance and receive different pension annuity benefits as a result of differences in life expectancy.
The ABI says that to offer unisex rates would leave women worse off when buying life insurance, while men would be worse off when buying annuities. This is because premiums for the lower-risk gender would have to go up to pay for the higher-risk gender.
The research adds that this may result in less cover being bought by low-risk customers and so the overall risk in the market would increase.
An ABI spokesman says: “It is right for insurers in the UK to use gender. If you take away the ability of insurers to take gender into account, that is going to be bad news for customers and could lead to an impact on premiums.”
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Readers' comments (4)
Jennie | 8 Oct 2010 9:49 am
The fundamentals of insurance is based on risk. Do the Eu CoJ not realised that by removing the ability to assess risk based on a number of factors all that will happen is that insurers will provide a blanket policy rate including eliminating age as a factor! How is gender discrimination in this instance any different from age discrimination. Its an unfortunate fact of life that data proves women have fewer accidents, even if they do have an accident, the costs of them are significantly lower to settle. We do have to also take into consideration that married couples (insured and spouse) policies are generally cheaper than a named driver policy - again, statistcally married men have fewer accidents. Are we saying that these men don't want this risk rating factor taking into account either?
This directive will make everyone worse off - other than the insurers of course! People need to get a grip - driving out race discrimination should have more focus than this rediculous directive. Women still get paid less in the market (that's a given fact), most women do more unpaid hours to 'run' a family home! Unfortunately that's just a fact of life too.
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Mike | 6 Feb 2011 2:32 pm
Love the fact that the only comment against this was posted by a female?
Correct me if I'm wrong but women have fought for equal pay and treatment in the work place for years..
If equality is what they fight for then why should they pay in most cases £1000 less for car insurance than males?
The injustice of it sickens me -_-
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David Buckeridge | 10 Feb 2011 2:55 pm
Ok Jennie, so where do you draw the line?? Maybe we should discriminate on the grounds of race as well? Maybe religion and sexual orientation too. If there were statistics to show homosexuals crash more than heterosexuals, maybe we should discriminate on those grounds. That is what you are advocating.
Discrimination in insurance premiums on the basis of gender is absolutely criminal, and I cannot believe it has been legal for so long. Everyone understands why insurance companies charge women less than men, so it is insulting to keep repeating "they do it because of risk". The question is, do we sacrifice fairness and justice for the sake of efficiency? In this case I strongly side with fairness. It is unfair to use the average attributes of a group of people to label one individual that belongs to that group. Of course young men, ON AVERAGE, are more likely to crash than young women, but to treat an individual differently on this basis is wrong.
I also believe that age discrimination in insurance is wrong. Generally, unless you can individually measure attributes that have been scientifically proven to effect accident likelihood - for example, spatial awareness, reaction time, "calmness" etc. - then you should not be able to discriminate. It is not enough for a group to be correlated with one of these qualities - e.g. gender is most probably somewhat correlated with speeding - unless the underlying individual quality that causes an increase in accident likelihood can be measured, then no discrimination should be allowed.
Some people say this is political correctness gone mad. This has nothing to do with political correctness. This is a triumph.
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Anonymous | 22 Feb 2011 4:10 pm
There are research studies which measure gender/culture/sexual orientation etc differences all the time. One group of people displaying specific attributes in attitudes and behaviours will behave differently in a specific setting than another. This is not a case of inequality or injustice, there is no sinister agenda. It is simply a risk assessment which must take into account all the factors attributing to the individual. The fact of life is that we are all unique, however, we can be grouped into general habits and behaviours, whilst this may on the surface seem unfair, it is not. This is simply a case of accounting for the fact that we are not equal in terms of behaviour and this should reflect in assessment of risk..
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