ABI: 'Boy racers face insurance ban'

Boy racers face an insurance ban if the gender discrimination rules come into force, Insurance Times can reveal.

An ABI briefing paper reveals that insurers could decide to ban cover for young male drivers using high performance cars.

The European Courts of Justice is set to rule in favour of a gender discrimination ban on Tuesday.

Under a chapter called, “The Impact of a ban on the use of gender in insurance pricing”, the paper says insurers may decide not to cover certain risks at all, if they are not allowed to use gender as a relevant-risk rating factor.

The paper says: “Instead of setting higher prices to deal with the pricing risks, insurers may respond to the removal of a relevant risk-rating factor by simply opting not to cover the risk at all or adjusting the design of the product such that the pricing risks for the insurer are more limited.

“For example, in the short term, a motor insurer may simply consider the risk of insuring young males with high-performance cars too great, in which case it may pull back and not write this insurance for young males.

“If it is not allowed to use gender in the underwriting decision, it may need to go further and remove the offering for both young males and females.

“A less extreme response would be for insurers to impose certain other restrictions on the policy, such as requiring a higher excess for all young drivers.”