1st March 2011 is a significant day for the insurance industry. Tomorrow, a ruling by the European Court of Justice will take place which could see companies banned from using gender to calculate annuity rates and insurance premiums. So what does this mean for female drivers?
If there’s a positive ruling in favour of the ban, young female drivers could experience large hikes in their car insurance premiums. It will be a big shake up of the industry, which currently takes gender into account when balancing risk and pricing policies. If the ruling is successful, it’s unlikely to come into immediate effect. Insurers will probably be given a three year transitional period to implement these changes.
Proposals for ‘gender equality’ have actually been in discussion for a number of years – although this is the closest it’s come to a ban actually being enforced. Most insurers will feel that such a ban will hinder their ability to mitigate risk and will make efficient insurance risk modelling more difficult. After all, insurers make their decisions based on robust statistical data that highlights a difference in risk between men and women.To give some context, the department of transport has reported that 95% of serious driving offences (those causing death or injury) are at the hands of young, male drivers.
Rather than encouraging fairer pricing between the sexes, it’s likely that a positive ruling could result in a rise in insurance prices for consumers across the board.
So, tomorrow could mean it’s all change for insurers; it’ll be interesting to see the outcome…
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