In the wake of the European Court of Justice’s new ruling that bans gender-based risk assessment for the sake of determining car insurance rates, experts come forward to say that both sexes will ultimately lose out.
Currently young men pay more for motor car insurance due to the increased statistical likelihood for them to file a claim. The annuity market will be effected by the new rule as well; due to the higher life expectancy of women, they have traditionally received smaller annuity incomes.
While the new ruling was designed to institute gender equality in both markets, more and more experts are predicting that the end results will instead prove disastrous.
As early as this past autumn, research findings commissioned by the ABI indicated that women aged 25 years old and younger could see an increase of 25 per cent in the rates of even discount car insurance. Meanwhile the British Insurance Brokers’ Association’s Steve Foulsham felt that increases could be as high as 50 per cent for women – and due to their undiminished riskiness, male drivers would see their rates reduced by little, if any.
Even those car insurance companies that specialise in providing cover to women exclusively will have to overhaul their pricing. Despite this, many such insurers as Sheila’s Wheels have announced they will remain steadfast in providing hand-tailored insurance to women.
However, there are some experts who feel that the decision of the ECJ will be limited and short term. Association of Financial Mutuals chief executive, Martin Shaw, was optimistic when he said that due to the competitive nature of the annuities and motor insurance markets, firms will find a way to develop risk assessment techniques that will be able to circumvent the new rules.