Up until now women have benefited from decades of data collected by insurance companies proving that they’re more careful behind the wheel than men. But that’s all going to stop. The European Court of Justice has ruled that insurers can no longer consider whether you’re a man or a woman when calculating the cost of your annual premium. So in any policy which takes gender into consideration, life-insurance will be affected. Yen Crowda Is from AA Insurance, he explains why this legislation has been passed.
The new legislation came about, because the European Court of Justice concluded last year that the state of legislation was incompatible with gender legislation. And, as a result, from 21st of December insurance companies will no longer be able to lawfully sell insurance that’s based on gender.
So, from the end of this year, selling car insurance based on risk associated with gender will no longer be lawful. Yen Crowda thinks the new method of calculating premiums will be unfair and that the current system of basing insurance on risk is a good system.
It’s blatantly unfair. The young women were going to see their premium’s rise quite high. What we’ve got now is gender equality, but we certainly don’t have fairness. For decades the U.K. insurance market has based insurance on risk, taking into consideration such things as your occupation, the type of car you drive, who drives it, how many miles you drive each year, the way you live and, importantly, gender. Now gender has been swept away at a stroke. And insurance companies are no longer allowed to base their premiums on that extremely fair system which works! And it’d continue to work as well, if it wasn’t for this legislation.
Feminist writer Kate Smith says that gender legislation is being used in the wrong way and will make young women picking up the bill for the risks young men take when driving.
I don’t think that there’s anybody out there who is very seriously affected by the fact that men have to pay a little bit more for their car insurance. I don’t think that makes a great difference in society. It’s a real shame, because we want this legislation to deal with. It’s the pay gap, it’s women being paid less for work of the same value, it’s women being discriminated against, because they might take maternity leave. I don’t very much mind them doing it. But it seems to me that that wasn’t not the idea behind the legislation, when it was brought in. It’s now being used to take the few very small advantages that women do have, and advantage we have for a legitimate reason, actually, because we do drive more carefully, we do cause less accidents on the road. The assumption that women are safer drivers is actually a kind of fair assumption and, perhaps, what we should be looking at, actually, is changing the way that the laws of the road work.
Insurance companies have been fighting this new law for the last decade, arguing on the basis of fairness. Adeola Ajayi is from the Association of British Insurers:
We fought against this law for nearly a decade. We didn’t want it, because we wanted the opportunity to continue issuing premiums that are fair.
So it seems decades worth of driving data is going to waste and it will be young women who will suffer the most financially. Here’s Yen Crowda:
It’s going to particularly affect young women-drivers because of the difference in risks associated with young men and young women. For example, during teenage years, let’s say from 17 to 22, young men are twice as likely to be killed or seriously injured on Britain’s roads than young women. The pulling of risk is how insurance works. But it really is a step too far, because removing of gender does put a great divide between men and women in the sense that women are now going to have to pay significantly higher premium than young men.
The European Commission has been promoting gender equality since 1957. It started 50 years ago with equal pay for equal work. But as for car insurance, after December, 21st you will no longer be asked whether you’re male or female. But it won’t be until New Year that Europe will be able to gage the impact gender neutral policies will have on people’s pockets. But it looks like young women will lose out the most and young men will see their premiums drop.