The new ban on calculating car insurance rates along gender lines will most likely have a significant effect on not just discount car insurance for women but on a wide range of insurance products, one expert from Deloitte recently warned.
Deloitte insurance partner, James Raklow, stated that there were serious repercussions of a consultation document from the government regarding how car insurance companies can use a customer’s gender as part of their risk assessment in the wake of last March’s ruling by the European Court of Justice. Mr Raklow remarked that, from December 21 of this year, insurers are banned from using gender as a factor in determining risk by the court’s decision, and the changes have the potential to impact more than just motor car insurance policy premiums.
The insurance partner claimed that the changes, if implemented, could be as much a threat as they could be an opportunity. Adding that those insurers who already use cutting edge technologies and innovative risk data sources may not see much of an effect, Mr Raklow commented that those in the position of poor quality data and legacy systems may be in an untenable position.
Mr Raklow predicted that the car insurance industry will most likely speed up their adoption of telematics-based risk assessments, as this method provides alternative criteria that will allow these insurers to assess risk in an accurate manner. However, the insurance partner said that the insurance industry is awaiting the consultation’s results in order to discover the extent of the challenges presented by the gender use ban.