Gender Differences and Insurance

On March 1st 2011 the ECJ confirmed the widely expected ruling that the use of gender as a means of discrimination in setting insurance premiums would be illegal from 21st December 2012 (21/12/12).

This ruling will result in the following anticipated changes in pricing.

• Car Insurance : young female drivers will have substantial rises in premiums. Older female drivers will have increases but not as great.

• Home Insurance : Gender is not used as a rating factor

• Travel Insurance : Gender is not used as a rating factor

• Caravan Insurance: Gender is not used as a rating factor

• Pet Insurance: Gender is not used as a rating factor

• Life Insurance: The cost of life insurance related products for females will increase

• Pension: The value of an annuity for a male will decrease

• Permanent health insurance: The cost for a male for PHI will increase.

The opposites will hold true but any decrease in premiums or increase in benefits will no doubt be less than the increases in premiums and decreases in benefits.

This ruling will have a serious impact on those insurance companies that market directly to women, such as 'Sheila's wheels' and 'Diamond'. They will either be wound down and their portfolio transferred over to their associated main companies or they will still target women drivers in their marketing but have to offer equivalent rates for any males who apply to them. Note that indirect discrimination e.g. loading for heavy manual workers who will be mainly male would also be interpreted as gender discrimination.

Another factor to consider is re-insurance. Many insurance companies may have re-insurance facilities in place for women drivers aged 17 to 18 but not for male drivers. Application of this ruling will apply to re-insurance as well and it is possible that women aged 17 and 18 will find it much harder to obtain insurance cover.

For more information contact JB Portwood john.portwood#portwood.co.uk