The EU Gender Directive or as it is more formally known COUNCIL DIRECTIVE 2004/113/EC came into effect in the United Kingdom on the 22 December and dictates that insurance companies can no longer use the sex of a policyholder as a factor in determining the premium under a policy.
Whilst this may seem equitable it does ride roughshod over the fundamental principles of a premiums being calculated by insurers based in the risks posed by the policyholder.
In motor insurance, the new legislation dictates that all other things being equal the premium for a male should be the same as for a female. This of course does not allow for the overwhelming statistical evidence that males are far more likely to be involved in and cause a serious accident. In the case of young drivers under the age of 23, a male is in fact 10 times more likely to be involved in an accident than their female counterparts.
There are many people holding forth as to the actual implications of these changes all offering statistics that vary from source to source but in fact do not stand up to any great critical analysis. One thing is for sure the premiums paid by females for car insurance will increase, there may be a reduction in the premiums paid by men but that does not necessarily follow and will only come about as a function of insurers demonstrating a desire to provide a more competitive product. Essentially female drivers will be subsidising male drivers,; but in truth is that not how insurance works anyway with the losses of the few being paid by the contributions of the many?
The astounding aspect of this whole business, is the quotes from several luminaries and authorities on the subject stating that this is an unforeseen consequence of the legislation. What nonsense, it is the direct and intended consequence of the legislation.
The bottom line is that insurers who have traded in the generally highly competitive if not profitable private car insurance sector will be looking hard at their marketing placement and their rates across private motor insurance and the emphasis will be more than ever on policyholders to make sure that the are obtain the best deal for their insurance requirements.
Behind the closed doors of many underwriters and intermediaries the EU Gender Directive will perhaps not be watched as closely as the developments in the motor legal expenses and claims market which for sure has a greater impact on the earnings of many providers.