Aviva group chief executive Andrew Moss has played down fears that insurers will significantly cut male annuity rates following the European Court of Justice ruling banning gender pricing.
Last week, the ECJ agreed with advocate general Juliane Kokott’s opinion that using gender as a factor when pricing insurance policies is discriminatory.
It has banned UK providers from using gender-based pricing from December 21, 2012.
In a conference call last week, Moss said it is “too early” to conclude that the changes will automatically penalise men buying pension products.
He says: “It takes time for the ruling to be implemented and we will see the market in the UK adapt during that period.
“We will have to see how it works through in a very competitive environment. It is far too early to say male annuity rates will definitely worsen.”
The Association of British Insurers has suggested that male annuity rates could fall by 8 per cent as a result of the ruling while it claims women’s rates could rise by 6 per cent.
Intelligent Pensions technical director David Trenner says: “There seems to be a general expectation that rates will be equalised down, with men getting annuity rates similar to those currently offered to women, but I do not believe this will be the case.
“The annuity industry has been given 21 months to consider how to underwrite people buying annuities more effectively and hopefully this will result in a better outcome for all of them.”
MetLife UK managing director Dominic Grinstead says: “The ruling does not change the actuarial reality that women live longer than men but it is up to the industry to adapt and innovate.”