European ruling bans sex discrimination by insurance firms
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A landmark ruling by the European Court of Justice means that insurance companies can not discriminate on the basis of sex when calculating premiums.
Insurance firms had an opt-out of a gender discrimination directive due to the wide use of sex in deciding premiums but the UK must now implement the policy into law by December 21 2012 at the latest.
In today’s judgement the Court points out that the European Union aims to eliminate inequalities and to promote equality between men and women.
Widespread use of differentiation between the sexes means the ruling will have a huge impact on the pricing of all insurance and protection products.
Matt Morris, senior policy adviser at Lifesearch, says: “This is a horrible mistake by the European Court. It is essential for insurers to use gender to calculate risk based on solid actuarial evidence and statistics. It is price differentiation, not discrimination, as it is not a decision that comes down to the whim of an individual.
“The consumer will now suffer. Prices will go up across the board as insurance companies try to build in the new risk. Women currently pay more than men for Life Insurance, whereas men pay less for Income Protection.
“It is very unlikely premiums to meet in the middle because there will be huge costs to the industry of re-pricing and updating their systems so everyone will end up paying the higher rate. Everyone loses.”
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Readers' comments (4)
peter | 1 Mar 2011 11:43 am
Not everyone losses, I'm sure there's plenty of lawyers out there who've got "compensation claims" ready to go...
this is just another sign that allowing the courts to rule in matters that are business driven is madness.
I'm against true discrimination, most people are, but the difference in insurance premiums is based on facts not a whim. So thanks a lot European Court, now we all will have to pay more for this ridiculous ruling.
I know, why don't we have a court in every street to say when we can cross the road, par a car, enter a shop or even breath !!!!
I'm off to join UKIP....
it's that or emigrate out of the European sub state we've become.
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Anonymous | 1 Mar 2011 1:08 pm
I'm sure the Belgian consumer group that brought this case to court thought they were doing the right thing ... why do men pay more? let's complain and then the insurance costs will come down ... All that happens now is that insurers will have increased costs to implement the changes which will be passed on and then the cost for women will increase, the exact opposite (i presume) of the intended outcome.
It is not discriminatory it is based on statistics/facts and then the perceived risks.
Well done Europe another fine industry about to be destroyed.
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John Tidswell | 1 Mar 2011 3:00 pm
Yet another ill thought out rediculous ruling which flies in the face of common sense. It has nothing to do with sex discrimination it is to do with risk assessment. What next? Will the premiums need to be the same regardless of your age so as not to discriminated against age?
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Andy Valvona | 2 Mar 2011 11:45 am
There are many things that legislation bans discrimination against, including, amongst others:
Gender
Age
Disibility
So, taking this incredibly stupid ruling a step further, this will leave the door open for an ill-advised consumer group to challenge insurers through the European Courts to stop rating policies on the grounds of health and age.
This means that a 65 year old, with a history of ill health, would be able to find life cover at the same premium as a fit and healthy 25 year old.
On the other side of the coin, we will see impaired annuities as a thing of the past.
The world has gone mad......or was the ruling just an April Fool made 1 month early?
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