In the UK, insurers considered gender when calculating premiums until 2012, effective 21st December, when the European Court of Justice’s gender ruling Act came into force, which stated that charging men and women different insurance prices would henceforth be considered illegal. This change has affected the field of car insurance the most, while the life and health insurance industries have also reported so as to be affected by the change.
The impact of the ECJ Directive
Towards Car Insurance
Until December 2012, insurers could charge men more than women because there were many more road accidents caused by young males than by females, and thus, they were more of a liability to the insurers. Since the insurance companies could no longer make a gender distinction after the ECJ’s directive, they statutorily increased the insurance premium for women. The move of equalisation had an overall benefit for most drivers in the UK as the data collected after a year of the gender ruling stated that almost all age groups witnessed a reduction in the amount of insurance premium they were quoted.
By November 2013, motorists witnessed an overall reduction of approximately £146, which included both men and women. Only young women drivers, typically aged between 17 and 21, witnessed a net increase of £10 towards their annual insurance premium. Young male drivers, on the other hand, witnessed the greatest reduction in their car insurance premium prices, which was approximately £936. Also, women in the age bracket of 45 to 49 benefitted from a reduction of £138 towards their insurance. Male motorists, on the whole, witnessed an overall decrease of £205, with the senior members aged over 65 witnessing a reduction of £26 towards their premium costs.
Towards Health and Life Insurance
Many policyholders are confused as to where health insurance is affected by gender. In fact, health insurance has not been affected as much after the ECJ Directive owing to the fact that the health insurers in the UK hardly take gender into account when calculating the health insurance premium of a customer. However, in countries such as the US, women are known to pay more premiums than men towards their private health insurance premiums.
Historically, women have more life expectancy than men and have paid lesser life insurance premiums. The ECJ now guarantees that gender bias has to be ignored, which has led women to pay 23% more towards their life insurance premiums and men to pay 3% less. However, if you took out a life insurance policy before the ruling came into being, chances are that your premium will not be affected.
Towards Income Protection Insurance and Critical Illness cover
Income Protection Insurance generally pays you a monthly sum of money if you are off work due to a medical condition or injury, while critical illness pays off a large sum of money towards your loans and mortgages if you suffer from a non-fatal but serious medical condition such as a stroke, heart attack or cancer. Both these insurances are expensive, and after the ruling of the ECJ Directive, women might have to pay a premium of 70% more than what men would have to pay for income protection. On the other hand, critical illness policy could rise by 16% for women and 6% for men.
How are some car insurers still dodging gender equality?
According to recent research conducted by the leading economists of the country, despite the strict guidelines, car insurers have found a way of dodging the directives of gender equality and are still charging their male customers more car insurance premiums as compared to women. Indirect gender discrimination is based on a person’s occupation. It was observed that motorists in the 20 to 40 age bracket paid lesser premiums if they worked in a female-dominated industry than if they were in a male-dominated one.
The data for this research was collected across six professions; two of which were male-dominated (builders and civil engineers), two female-dominated (social workers and nurses) and the remaining two gender-neutral professions, such as office executives and solicitors. Civil Engineers were found to pay 13% above the average premium price while nurses paid 10% lower, which means that male nurses paid more or less the same car insurance as their female counterparts of the same profession. This is a smart way to imply how insurance is affected by gender. The only exception in this case was found to be for the social workers. Despite being a female-dominated industry, the professionals paid higher premiums since they mostly visited rural and deprived areas.
It was also observed that customers from male-dominated industries mostly accrued higher premiums until they reached the age of 50, after which the premium cost evened out for both genders. Therefore, it has not been determined that occupation is one of the most important aspects that insurers review before providing a quote to consumers. Since some occupations are mostly held by either men or women, it leaves scope for insurers to make gender discrimination under their canopy.
How can customers keep their insurance premiums in check?
Instead of worrying about how insurance is affected by gender, the only way to benefit from the lowest insurance prices is by conducting detailed research on the web and comparing the prices offered by various insurance companies. Sometimes, the selection of a profession on the insurance application form, which is not detailed and specific, might assist in saving a few quid towards your insurance premiums as insurers tend to make huge discrimination in terms of their customers’ profession.
Customers who intend to buy car insurance premiums can consider adopting the black box technology, which monitors the driver’s performance and assists careful drivers in obtaining a lower insurance premium. It is also imperative to contact insurers or brokers and seek clarification about their insurance policies and premiums.