Car insurance companies across Europe were left reeling by a recent European Court of Justice ruling that prevents the use of gender to calculate risk. As the full impact of the ruling is felt across the continent, it seems motor insurance companies will not be alone in the challenges they now face.
Car insurance for women at moneysupermarket.com have benefited from cheaper insurance premiums than men for a long time now. In calculations for health insurance, life insurance, car insurance and annuities, the fact that women are seen statistically as a lower-risk group than men has meant women benefit from lower costs.
That is all set to change in December 2012, when the ECJ's March 1st ruling on gender discrimination comes into effect, banning insurers from using gender as a factor in their calculations.
Female-focused car insurance companies such as Diamond and Sheila's Wheels were started to cater especially to women, with their rates wholly unavailable to men. Womens car insurance from Moneysupermarket rates are now set to rocket by as much as a quarter on their current premiums, in line with the new 'fairer' ruling.
Maggie Craig, Director General of the Association of British Insurers, spoke out to cool the fears of women who might be worried about their insurance costs skyrocketing.
Insurance groups, especially those who cater exclusively to women, have generally reacted with disdain, with insurance group RSA describing the legislation as "flying in the face of common people".
Clearly, business models like the one adopted by Sheila's Wheels are under serious threat.
Upon reaching retirement, people will often buy an annuity with their pension fund to guarantee them a fixed income for the rest of their life. Because women statistically live longer than men, a woman will more often than not be offered lower payouts than those offered to men with an identical pension fund.
But now, the ECJ ruling means women and men will be treated equally when they buy annuities, meaning men's annuities will now be as much as eight per cent lower, according to the Association of British Insurers, while women's could rise by as much as six per cent.
George Ladds, Head of Pensions at Fair Investment Company, said: "Either rates for men and women will be brought in line to create 'unisex' annuity rate, which will probably see men's rates go down more than women's go up - or annuity providers will have to start looking at each case individually, which is more expensive, and that cost will be passed onto the consumer. "Either way, the consumer loses out on both choice and value. Annuity rates are already low, and this could be the excuse providers need to pull them even lower."
Life Insurance
He added: "It is particularly alarming given that the head of the Association of Police Officers in the UK in 2005 noted that the biggest killer of young women in Britain is their boyfriend's and male friends' driving."
She said: "Not all customers will be equally affected as the use of gender can vary significantly between products and different companies. Each company will have to respond to the ban in a way they feel is in their customers' interests."
Maggie Craig, Director General of the Association of British Insurers, called to women not to be put off buying essential cover by the new legislation:
Health insurance
Health insurance, unlike life insurance, costs women more, because statistics say that they're more likely to suffer illness and claim on their insurance policy. As of December 2011, then, this will not be the case, and women's health insurance rates are most certainly set to fall.
"Either way, the consumer loses out on both choice and value. Annuity rates are already low, and this could be the excuse providers need to pull them even lower."
Car insurance for women at moneysupermarket.com have benefited from cheaper insurance premiums than men for a long time now. In calculations for health insurance, life insurance, car insurance and annuities, the fact that women are seen statistically as a lower-risk group than men has meant women benefit from lower costs.
That is all set to change in December 2012, when the ECJ's March 1st ruling on gender discrimination comes into effect, banning insurers from using gender as a factor in their calculations.
Female-focused car insurance companies such as Diamond and Sheila's Wheels were started to cater especially to women, with their rates wholly unavailable to men. Womens car insurance from Moneysupermarket rates are now set to rocket by as much as a quarter on their current premiums, in line with the new 'fairer' ruling.
Maggie Craig, Director General of the Association of British Insurers, spoke out to cool the fears of women who might be worried about their insurance costs skyrocketing.
Insurance groups, especially those who cater exclusively to women, have generally reacted with disdain, with insurance group RSA describing the legislation as "flying in the face of common people".
Clearly, business models like the one adopted by Sheila's Wheels are under serious threat.
Upon reaching retirement, people will often buy an annuity with their pension fund to guarantee them a fixed income for the rest of their life. Because women statistically live longer than men, a woman will more often than not be offered lower payouts than those offered to men with an identical pension fund.
But now, the ECJ ruling means women and men will be treated equally when they buy annuities, meaning men's annuities will now be as much as eight per cent lower, according to the Association of British Insurers, while women's could rise by as much as six per cent.
George Ladds, Head of Pensions at Fair Investment Company, said: "Either rates for men and women will be brought in line to create 'unisex' annuity rate, which will probably see men's rates go down more than women's go up - or annuity providers will have to start looking at each case individually, which is more expensive, and that cost will be passed onto the consumer. "Either way, the consumer loses out on both choice and value. Annuity rates are already low, and this could be the excuse providers need to pull them even lower."
Life Insurance
He added: "It is particularly alarming given that the head of the Association of Police Officers in the UK in 2005 noted that the biggest killer of young women in Britain is their boyfriend's and male friends' driving."
She said: "Not all customers will be equally affected as the use of gender can vary significantly between products and different companies. Each company will have to respond to the ban in a way they feel is in their customers' interests."
Maggie Craig, Director General of the Association of British Insurers, called to women not to be put off buying essential cover by the new legislation:
Health insurance
Health insurance, unlike life insurance, costs women more, because statistics say that they're more likely to suffer illness and claim on their insurance policy. As of December 2011, then, this will not be the case, and women's health insurance rates are most certainly set to fall.
"Either way, the consumer loses out on both choice and value. Annuity rates are already low, and this could be the excuse providers need to pull them even lower."
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