Young driver premiums drop prior to EU Gender Directive

Motor premiums for young drivers have fallen slightly, while the gap between young male and female drivers is closing, AA Insurance’s latest report has revealed.

The findings from the benchmark AA British Insurance Premium Index come ahead of the deadline for the EU’s gender directive on 21 December 2012.

The Index revealed that premiums for drivers aged 17-22 declined, following sustained increases over the past two years which reflect the growing cost of claims, especially young men. 

Over the third quarter, young men saw their average premiums drop by 0.7% to £1,603 while those for young women declined by 2.2% to £1,127. 

AA director Simon Douglas said: “The gap between young male and female drivers had been gradually closing, although the latest Index shows that premiums have fallen further for young women than for their male peers. It may be that some insurers are taking a longer term view of profitability, recognising that premiums will rise at renewal when they cannot reflect gender in their rates.

“Just weeks from the ECJ gender change directive deadline, young female drivers are paying on average, £500 less for their cover. For new drivers, my advice to young women would be to buy their insurance as soon as they can, while young men might be advised to wait until the New Year, since their premiums for them are likely to fall further.”

AA Insurance will introduce its gender-neutral pricing ahead of the EU deadline.