Women drivers face renewing insurance policies

[Ben]

EU gender ruling could force woman to seek new cover immediately

A European ruling on gender equality could force millions of female drivers into renewing their insurance policies once it comes into force, reports The Telegraph.

Firstly, I admit that I have stolen the following from http://www.insurancetimes.co.uk/story.asp?sectioncode=13&storycode=389141&c=2

It reads as follows:

In a private letter sent by the ABI to its board members, it told them to prepare for a judgment by the European Court of Justice that using a person's sex to calculate insurance premiums is illegal.

However the ABI has also now acknowledged that the ruling could apply to existing insurance contracts.

The move has prompted experts to fear that this would immediately push up the costs of motor insurance premiums for women by a quarter.

Acting director general Maggie Craig said in the letter that the judgement is expected at the beginning of March.

"After careful consideration, our firm advice is that member companies should make the necessary preparations for a judgment by the ECJ that as a general principle differences in premiums and benefits in insurance contracts based on gender are illegal.

"We cannot safely determine whether the judgment will apply to existing contracts. However, we advise member companies to include in their preparations the possibility that the judgment may apply to existing contracts."

 

[staffordjas]

Great!

Just the news I needed after having to fork out for an unexpected garage bill today,since our usually trustworthy car decided to break down this morning

 

[shoes]

Surely retro-application of such legislation couldn't happen as it would have not been illegal at the time the policy was taken out?

Will this lead to men's insurance coming down and women's going up until they meet in the middle and everyone pays the same, or are insurance companies who undoubtedly make humongous contributions to the EU going to be creaming it in further...... i wonder =|

 

[Ben]

No idea, this legislation has been passed in Europe so it will be interesting to see how it works out....

I cant imagine that the law will be provided retrospectively, however, Insurers may have to review their rating structure moving forwards. I cant say that I agree with it, its all about numbers and if the numbers suggest ladies are better drivers then their premiums should reflect that. Lets hope age discrimination isnt next on the agenda!!

As for Insurers creaming profits, last time I checked the domestic motor market was running at about 120% (i.e for every £1 you give them, they pay out £1.20 in claims, hence the strong action taken on rates this year)

 

[shoes]

Fair point, I was reading about a few companies who have made losses in the last year, although surprisingly some brokers are doing very well. Admiral for example, who I'm insured with, with the lowest quote by a clear £150 i might add, seems to be creaming it - £200m+ profits last year. I'm led to believe they underwrite themselves although I'm not sure how though.

 

[Ben]

Fair point, I was reading about a few companies who have made losses in the last year, although surprisingly some brokers are doing very well. Admiral for example, who I'm insured with, with the lowest quote by a clear £150 i might add, seems to be creaming it - £200m+ profits last year. I'm led to believe they underwrite themselves although I'm not sure how though.

Yes, Admiral have 10% of the market and dont seem to have felt the full hit of the bodily injury / credit hire claims which is strange as Direct Line have been smashed as well as a number of other underwriters.

Ive just put the wifes car with Admiral!

 

[shoes]

They were ideal for me (young man, new licence holder), no one else could even come close (as I said, a clear £150 difference).

How are the strict insurers faring, the ones who only accept women over 50 who have never made a claim or broken the law etc.? Given the bending over the motorist has had in the last two decades, there can't be many of those clients left!

 

[tek-monkey]

So if this ruling means women will pay more, then men will pay less accordingly? Or is it just an extra charge because they can?

Don't worry, I know the answer!

 

[Florence]

Doesn't this mean all insurance taken out is illegal, if the sex of the insured person is taken into account? Male drivers are charged more for being male. Isn't this opening a huge can of worms?

 

[Withnail]

Lets hope age discrimination isnt next on the agenda!!

Surely that's inevitable, isn't it?

Isn't this opening a huge can of worms?

You would think so, wouldn't you?

 

[db]

In a private letter sent by the ABI to its board members, it told them to prepare for a judgment by the European Court of Justice that using a person's sex to calculate insurance premiums is illegal.

well, sheila's wheels are buggered then lol..

 

[Miss Red]

Surely the buck couldnt stop there. Wouldnt it then make cheaper insurance by age also illegal? along with cheap/free tv lic for over a cetain age? After all doesnt the age thing, come under the same discrimination act as sexism?

 

[Ben]

I have no idea, Dont forget there are so many players now in the motor insurance market that its impossible for all Insurers to use this as a tool to increase all premiums, basically because those that do will lose market share.

Im glad im in the SME game as it looks a complicated task to implement.

 

[Toble]

Just tried to get a quote with those Meercat folks.
Same set of details, but 40 quid cheaper if I pretend to be a woman.

 

[Gramaisc]

Just tried to get a quote with those Meercat folks.
Same set of details, but 40 quid cheaper if I pretend to be a woman.

You should get away with it - I saw a Forumite get quite confused last week when a form he
(or she) was filling in required to know his (or her) 'Sex at birth'....

 

[Ben]

Next week's ECJ ruling could drastically impact young male drivers driving high performance cars, says ABI paper

Boy racers face an insurance ban if the gender discrimination rules come into force, Insurance Times can reveal.

An ABI briefing paper reveals that insurers could decide to ban cover for young male drivers using high performance cars.

The European Courts of Justice is set to rule in favour of a gender discrimination ban on Tuesday.

Under a chapter called, “The Impact of a ban on the use of gender in insurance pricing”, the paper says insurers may decide not to cover certain risks at all, if they are not allowed to use gender as a relevant-risk rating factor.

The paper says: “Instead of setting higher prices to deal with the pricing risks, insurers may respond to the removal of a relevant risk-rating factor by simply opting not to cover the risk at all or adjusting the design of the product such that the pricing risks for the insurer are more limited.

“For example, in the short term, a motor insurer may simply consider the risk of insuring young males with high-performance cars too great, in which case it may pull back and not write this insurance for young males.

“If it is not allowed to use gender in the underwriting decision, it may need to go further and remove the offering for both young males and females.

“A less extreme response would be for insurers to impose certain other restrictions on the policy, such as requiring a higher excess for all young drivers.”

 

[John Marwood]

 

[proactive]

I'd like to ride that...