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Emma Simon: Insurers are being shy about gender changes

Emma Simon MM blog

I’m forty, female and drive a rather dull Mazda estate. On the face of it not a bad insurance risk – if you overlook the fact that I earn my living as a journalist.

But come next January, when the renewal is due, I’m expecting a larger increase than usual. This is, of course, thanks to a much derided bit of EU legislation which has achieved that rare feat of getting the insurance industry, the broker market and the consumer lobby to agree with one another.

All agree this is bad news for consumers but the times for such protests have long since passed and the new rules will be implemented in just over two months’ time.

Insurers have had almost two years notice of this change so you would think that by now they would be in a position to give some indication as to what motorists like me might pay once this EU Gender Directive comes into force.

I tried ringing my insurer to get an answer but none was forthcoming. Women in my age group shouldn’t be too (ital) adversely affected, I was told. So, does that mean no price rise at all I asked. Not surprisingly, they would not confirm this.

The official line from the Association of British Insurers is that it is only women far younger than me that will see significant price increases. Its best guesstimate is that the cost on an annual policy will increase by about 25 per cent.

According to the AA this could add a further £460 onto typical premium paid by a woman in her early 20s and around £300 for those in their mid-late 20s.

There is also likely to be a slight increase in costs for women in their 30s. Around my age this change should not have any impact on premiums but this doesn’t rule out “other factors” pushing up insurance costs.

Insurers insist they can’t disclose rates for ‘competition reasons’, with most large insurers claiming that legal advice says that any prior notification of rates might could lead to charges of price fixing in the industry.

But it also, rather conveniently, allows them to try and retain a competitive advantage over rivals for as long as possible, an underwriters’ game of chicken if you like, where they all wait to the last possible minute before revealing where exactly they set the price between current male and female rates.

And I can’t help thinking that this reluctance to disclose rates also enables motor insurers, whose profits are under threat by the Competition Commission review, to bump up a few other premiums on the way and blame it all on this gender directive.

This is all very irritating to customers like me, who can’t get any information from a company to whom I pay several hundred pounds a year.

It will be even more problematic for younger drivers. If I was 15 years younger I would definitely want to have this information so I could make an informed decision about whether it’s best to cancel my current policy now and renew before December 21, or collect my no claims bonus for the year, avoid the cancellation fees and pay a marginally higher rate come renewal date.

But how much more frustrating to the brokers and advisers – as well as the third parties such as price comparison sites – that purport to advise consumers on such matters. They seem as much in the dark as the average consumer.

As many have pointed out this is one of the biggest overhaul of prices seen in recent year, and some guidance would be much appreciated.

Insurers currently offer 30-day and 90-day “guaranteed” quote periods. Will such a quote given prior to December 21 be valid after this date? Legal opinion on the matter seems divided with some insurers saying yes and others the exact opposite.

Investment companies have been criticised for dragging their heels over RDR changes, and being slow to communicate with financial advisers.

General insurers seem to be doing exactly the same over this gender directive. There has been a better response from annuity providers. LV=, Partnership and the Pru have all stated when they will move to gender neutral pricing, and when customers need to apply to get deals on current rates.

It is now time for those in car insurance to move up a gear and follow suit.

Emma Simon is deputy personal finance editor at the Telegraph Media Group

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  1. I would have expected a more balanced view from deputy personal finance editor.

    It is well known that the gender directive is lacking in detail, the ABI have been impotent in their advice leaving several possible roads providers can follow

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