ECJ ruling on gender to affect all policies

4th March, 2011

The Association of British Insurers has described the decision taken by the European Court of Justice as “disappointing” after the ECJ ruled that using a person’s gender to price up an insurance policy was illegal.

Insurance companies have used the sex of a customer to determine the likelihood of having an accident or driving recklessly when producing a quote for car insurance and priced the policy premium accordingly.

Based on past statistics it has been found that the likelihood of women under 25 years of age being involved in accident or causing an accident was far less likely, especially in the first few years of driving. This statistic can no longer be used and the cost of insuring women will cost the same as insuring a man, the cost to a young woman driver will now increase by an average of 25% and the cost for a man will now decrease.

The Association of British Insurers has said that all insurance companies will need to make large scale changes to all of its advertising literature, changes to existing computer systems and adjusting existing insurance renewals.

The ruling does also affect life insurance premiums. Women could see their life insurance premiums rise by as much as 20% and men may see a fall of as much as 10%.

 

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