In a few weeks’ time, insurers will not be allowed to take gender into account when calculating premiums, but the market’s reaction remains to be seen
The derogation to the EU Gender Directive is creeping towards implementation. In just over 10 weeks, insurance pricing will become gender-neutral. This has big implications for insurers. From 21 December 2012, they will no longer be able to take gender into account when calculating premiums in new contracts.
However, with so little time remaining for insurers to get their houses in order, any significant effect on rating remains to be seen. Women, who typically benefit from lower premiums, are expected to be hit hardest.
But our story today on the latest MoneySupermarket Monitor on car insurance details how female drivers are still benefitting more from falling car insurance prices over their male counterparts, with the gap between men and women yet to close. On average, car insurance for men costs £111 more than for female drivers. Also, car insurance deflation has been higher for women at 11.1%, compared to 9.9% for men.
GI insurers are keeping their cards close to their chests, and the current signs are that premiums for women will remain competitive for some weeks yet. Recently, Zurich revealed a planned timeframe for implementation in its UK life division, announcing that its UK Life gender-neutral pricing will be available from 10 December on its adaptable life plan guaranteed rates and income protection plan. On Zurich’s level protection and decreasing mortgage cover plan, gender-neutral pricing will take effect from 17 December. However, it has yet to establish similar dates for its GI products.
In a recent interview with Insurance Times, Esure chief executive Stuart Vann said the effect of the Court of Justice gender ruling on the insurer’s profits and revenues would “ultimately depend on what the market does when the gender ruling comes into force.” Who will play their hand first, and when?