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    1. #1

      Join Date
      Feb 2011
      116 times
      cerberus1 is on a distinguished road

      Insurance set to rise across Europe for women

      The European Court of Justice today ruled that insurers can't charge different premiums to men and women because of their gender.

      The decision means that women can no longer be charged lower car insurance premiums than men, and the cost of buying a pensions annuity will change.

      The court was ruling on a challenge by a Belgian consumer group Test-Achats.
      It had argued that a current exemption for insurers contradicted the wider European principle of gender equality.

      "Taking the gender of the insured individual into account as a risk factor in insurance contracts constitutes discrimination," the ECJ said.

      The requirement for unisex insurance premium and benefits will start on 21 December 2012, giving national governments and the European insurance industry time to adjust.

      For car insurance, women are generally a lower risk to insure than men but will, in due course, have to pay the same premiums.

      The British Insurance Brokers' Association (BIBA) said currently the cost of the average car claim by an 18-year old man was 4,400, while that for an 18-year old woman was 2,700.

      "The ruling will have a significant effect on the insurance industry which has used the system of risk based pricing to award discounts to lower risk drivers like young females who are statistically safer drivers," said Graeme Trudgill of BIBA.

      "The industry will have to change its model and effectively females will now pay a cross subsidy for males on their insurance premiums."

      Simon Douglas of AA Insurance said that the decision could add about 400 to the annual cost of car insurance for a young woman.

      "Particularly for women under 30 where the difference is most extreme, they currently pay about half what a man would pay," he said.

      The ECJ decision will also affect the cost of buying an annuity - an annual pension - as women live for longer than men and so receive a smaller annual pension for the same pot of money.

      The insurance industry has warned that the change will lead to men receiving a smaller annuity income than they do now when their benefits are brought into line with those for women.

      Tom McPhail, a pension specialist at the investment firm Hargreaves Lansdown, said the ECJ decision was a "seismic event which will fundamentally reshape the retirement landscape".

      He predicted that annuity rates would equalise for men and women, at levels higher than female rates but "significantly worse" than current annuity rates for men.

      "Rates will be volatile for the next few months as insurers monitor their new business and adjust their pricing in response to experience," Mr McPhail said.

    2. Moneycorp - Commercial foreign exchange since 1979
    3. #2
      Thanks for the info, Rob. Very useful.