On April 6, 2008 the EU Gender Directive was transposed into English law through the Sex Discrimination regulations. The regulations allow insurance companies to use gender differences when pricing insurance policies, providing these differences are based on accurate and regularly updated statistical data.
The ABI says its data, and data published by Continuous Mortality Investigation, provides evidence of differences in claims patterns between genders for the relevant insurance products. It will enable insurers to continue to use gender as one factor in pricing policies.
The data illustrate industry aggregates. The ABI says, as several other factors are used by insurance companies to price policies, no direct relationship can be drawn from it to any individual policy. But it says the data does show the relevance of gender in the insurance underwriting process.
The ABI’s data cover motor insurance and private medical insurance while the CMI’s data cover life, critical illness and income protection policies as well as annuities.
An ABI spokesman says: “The insurance industry is against unfair discrimination of any kind, and does not practice it. But it is legitimate for companies to set prices, levels of cover and benefits according to a number of factors which together determine the relative risk that any given customer poses. This principle has long been accepted by society. The Gender Directive, and the UK Government’s transposition of it into domestic legislation, recognised this, and charged the insurance industry with compiling and publishing data to show the relevance of gender in making underwriting decisions. This has now been done. As a result, customers will continue to be able to benefit from fair pricing and a range of products which suit their needs, at affordable prices.”