Blog
Gender Pricing in Insurance
2nd March 2011
The European Court of Justice has ruled that gender “can’t be used as a factor” when working out the cost of insuring someone.
“The use of actuarial factors related to sex is widespread in the provision of insurance and other related financial services. In order to ensure equal treatment between men and women, the use of sex as an actuarial factor should not result in differences in individuals’ premiums and benefits.”
Lots of coverage about this today most focusing on the risks that insurance premiums for women drivers who are by-and-large safer drivers on our crowded roads will now go up. But my instinct is that insurance companies for far too long have been discriminating against younger male drivers, many of whom have a higher disposable income that women of the same age (and the insurance companies know this).
Instead of getting worked up about this EU ruling more attention should be given to the much bigger problem of the millions of people in the UK who decide (for one reason or another) to drive uninsured vehicles - that is a danger and a risk that affects us all.
Guardian: Discrimination ruling: Fast cars, sex and insurance Telegraph: UK insurers criticise European ban on gender-based pricingNews video: Gender insurance pricing comes to an end (BBC news, December 2012)
Geoff Riley
Geoff Riley FRSA has been teaching Economics for over thirty years. He has over twenty years experience as Head of Economics at leading schools. He writes extensively and is a contributor and presenter on CPD conferences in the UK and overseas.