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Knock-on effects raise protection fears

The protection industry has raised concerns about potential knock-on effects of the European Court of Justice’s ruling that insurers cannot price products based on gender.

The ECJ gave its judgment this week following a test case brought by Belgian consumer group Test-Achats, which suggested that to price products such as annuities and life insurance according to gender was a form of discrimination.

Currently, women pay less for life insurance but more for income protection due to the fact that they live longer. As a result of this week’s ruling, insurers will have to radically change the way they price life insurance and will also have to reassess underwriting systems for life cover, critical-illness cover, and income protection. Some private medical insurers with legacy policies will also need to adjust their pricing accordingly.

Lifesearch senior policy adv- iser Matt Morris says it is not clear from the judgment whether gender loading, where underwriting may factor in family history of gender-specific illnesses such as breast cancer, will be allowed to continue.

He says: “If someone has a family history of breast cancer would women be loaded for that, but not men? Is that allowed or not? These are questions that no one really has the answers to.”

Bright Grey proposition director Roger Edwards says it remains a grey area whether insurers can continue to ask gender specific questions as part of the underwriting process.

He is also concerned about what would happen if the ban on use of gender was extended to other potentially discriminatory factors.

He says: “Undoubtedly if we could not charge based on either gender, age or disability, we would end with a breadline subsistence benefit rather than individual cover.”

Protection Review chief executive Kevin Carr believes the industry will increasingly look to other factors to price risk, such as postcode or lifestyle factors.



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