ABI publishes consumer guidance on ECJ gender rule
The Association of British Insurers has published guidance for consumers regarding the main insurance products that will be affected by the incoming European gender ruling.
A ruling from the European Court of Justice in March 2011 means that by 21 December 2012 insurance pricing will become ‘gender-neutral’.
The ABI said that the main products to be affected by the ruling include motor insurance, life, critical illness and income protection insurance as well as retirement products such as annuities and income drawdown. And while people will see some changes to pricing, the ABI is urging customers not to focus on price alone, but make sure they shop around and buy products that are suitable for their specific needs.
Gender has always been one factor in assessing risk in insurance, with different risks linked to gender being taken into consideration to calculate premiums and benefits. Women, for example, have typically benefited from lower car insurance premiums because of their lower accident rates, and men have tended to receive higher annuity rates because of their shorter life expectancy.
Otto Thoresen, director general at the ABI, said: “Insurers and the UK government fought for nearly a decade to retain the right to offer premiums and benefits priced as accurately as possible by considering risks linked to gender. But now that the battle is over, the industry is focused on preparing to give customers ‘gender-neutral’ rates that are as fair as possible.
“We know that there will be some differences in pricing and this will become clearer as the rule beds in. It is important to remember that gender is one factor of many used by insurers, and we hope our guidance will encourage customers not to focus on price alone, but think about their needs and shop around for products that are most suitable for them.”