We have discussed earlier this year the legislation in Europe which deemed it discriminatory to charge different rates for men and women. But what would the impact be on the insured and their insurance premiums?
European consumers face increases of up to 30 percent in their insurance costs when a ban on insurers charging men and women different rates comes into force next year, with women set to be hardest hit, Europe’s main insurers’ lobby said.
Women will have to pay 30 percent and 11 percent more respectively for term life insurance and motor insurance, while men face a five percent drop in annuity income, the CEA said on Tuesday, citing a study commissioned by German insurance industry association GDV.
“The ban on gender insurance pricing may have a number of potential unintended negative consequences for consumers, insurance markets, and society more generally,” CEA Director General Michaela Koller said in a statement.
Europe’s highest court in March ruled that insurers’ practice of charging men and women different prices was discriminatory, and ordered them to adopt a “unisex” approach from December 2012.
The decision has drawn condemnation from the industry, which says differential pricing for men and women is legitimate given their different risk profiles.
Women currently pay less than men for car insurance because they are statistically less likely to be involved in accidents, but get lower annuity payments to reflect their longer average life expectancy.
Annuities are contracts which pay a regular income for the remainder of the policyholder’s life in return for a lump sum paid on retirement.
The CEA said it would resist any attempt to ban the use of age or disability in setting insurance prices.
“Such a ban would have a massive impact on the affordability and availability of insurance,” Koller said. – Reuters
- Why do women pay less for their car insurance premiums?
- How do male and female drivers perceive the driving ability of the other gender?
- Women drivers and Car Insurance