Insurers have "tough decisions ahead"
The Actuarial Profession says today’s European Court of Justice’s on gender discrimination in insurance pricing could have "wide ranging consequences".
Ronnie Bowie, president of the Institute and faculty of actuaries, said: “Insurance companies have some tough decisions ahead.
"They will need to provide convincing evidence to justify any future differences between men and women, between old and young and between the healthy and the unhealthy. Consumers also need to be wary but, as now, there will be better value for those who are prepared to shop around.”
Motor insurance actuary, Duncan Anderson, said: “Motor insurance premiums vary by type of person to reflect the different likelihood of accidents and claims. The latest figures from the Confused.com/Towers Watson Car Insurance Price Index show that the average comprehensive premium for men in the UK is £728, compared to £655 for women, a difference of just over 10%.
"However, for 17-20 year olds, the premium differential is far greater: £2,976 on average for young men and £1,694 for young women, a difference of 75%. The difference reflects the significantly different claims experience between men and women at these ages.
"If insurers have to immediately stop using gender as a factor in setting car insurance premiums, the effect of combining the claims experience of men with those of women, particularly in younger age groups, would be substantial premium increases for women.
"On the basis of averaging out the most recent premium index data, 17-20 year old women might anticipate rises of around 40% if insurers equalised rates, with the increases being much higher still if, in the short term, insurers just moved female rates to equal male rates.”
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