The ECJ's gender judgment may be just the beginning

This week, a Belgian consumer association sneezed and the multibillion-pound European insurance industry caught a cold.

The ruling on a test case against a specialist provider of sickness insurance means that insurers can no longer price according to gender. Yes, it’s pure madness. Yes, it will result in women paying higher premiums. And yes, it will have major implications for other products.

There is no route of appeal against the decision so, like it or not, the die is cast. If there is one small solace, it is that the industry has a near two-year reprieve, giving it some time to make the huge necessary adjustments.

The ECJ doubtless failed to consider that the ruling now comes into force at the same time as Solvency II – a further burden on creaking actuarial and underwriting departments that can ill afford it.

Some argue that there’s good news. The ruling provides insurers with an unassailable excuse to hike prices in a struggling market. Yet by the time it comes into force, the market should have stabilised anyway – and the pot of premium is unlikely to get any bigger, it will simply be reallocated.

Is this a sign of things to come? That’s the biggest fear. Age is the next obvious basis on which to challenge so-called discrimination, and no doubt some enterprising body will be bringing a test case to a court near you soon. Next time, the industry needs to get on the front foot. It must ensure all risk factors aren’t chased out of the underwriting process in some bizarre, politically correct witch-hunt. IT

ellen.bennett@insurancetimes.co.uk.

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