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Is Insurance Affected By Gender?

Insurance Revolution Blog , Male Drivers , Female Drivers

In the UK, the insurers considered gender when calculating premiums until in 2012, effective 21st December, the European Court of Justice’s gender ruling Act came into force which stated that charging men and women different prices for insurance would henceforth be considered as illegal. This change has affected the field of car insurance the most while the life and health insurance industries have also reported so as to being affected by the change.

The impact of the ECJ Directive:

  • Towards Car Insurance

Until December 2012, insurers could charge men more than women owing to the fact that there was much more road accidents caused by young males as compared to females and thus, were more of a liability to the insurers. Since the insurance companies could no longer make a gender distinction after the ECJ’s directive, they statutorily increased the insurance premium for women. The move of equalization had a overall benefit for most of the drivers in the UK as the data collected after a year of the gender ruling stated that almost all age groups witnessed a reduction in the amount of insurance premium they were quoted. By November 2013, motorists witnessed an overall reduction of approximately GBP 146 which included both men and women. Only young women drivers, typically aged between 17 and 21 witnessed a net increase of GBP 10 towards their annual insurance premium. Young men drivers on the other hand witnessed the greatest reduction in their car insurance premium prices, which was approximately GBP 936. Also, women in the age bracket of 45 to 49 benefitted from a reduction of GBP 138 towards their insurance. Male motorists on the whole witnessed as overall decrease of GBP 205 with the senior members aged over 65, witnessed a reduction of GBP 26 towards their premium costs.

  • Towards Health and Life Insurance

Many policy holders are confused so as to where health insurance is affected by gender. In fact, health insurance has not been affected as much after the ECJ Directive owing to the fact that the health insurers in the UK hardly take gender into account when calculating the health insurance premium of a customer. However, in countries such as the US, women are known to pay more premium than men towards their private health insurance premium.

Historically, women have more life expectancy than men and have paid lesser life insurance premium in the past. The ECJ now guarantees that the gender bias has to be ignored hence forth which has led women to pay 23% more towards their life insurance premium and men to pay 3% less. However, if you have taken out a life insurance policy before the ruling came into being, chances are that your premium will not be affected.

  • Towards Income Protection Insurance and Critical Illness cover

Income Protection Insurance generally pays you a monthly sum of money if you are off work due to a medical condition or injury while critical illness pays off a large sum of money towards your loans and mortgages if you suffer from a non fatal but serious medical condition such as a stroke, heart attack or cancer. Both these insurances are expensive and after the ruling of the ECJ Directive, women might have to pay a premium of 70% more than what men will have to pay towards Income Protection. On the other hand, critical illness policy could rise by 16% for women and 6% for men.

How are some car insurers still dodging gender equality?

According to a recent research conducted by the leading economists of the country, despite the strict guidelines, car insurers have found a way of dodging the directives of gender equality and are still charging their male customers with more car insurance premium as compared to the women. The indirect gender discrimination is being based on a person’s occupation.  It was observed that, motorists who were in the 20 to 40 age bracket paid lesser premiums if they worked in a female dominated industry as compared to the being in a male dominated one. The data for this research was collected across six professions – two of which were male dominated (builders and civil engineers), two female dominated (social workers and nurses) and the remaining two gender neutral professions such as office executives and solicitors. Civil Engineers were found to pay 13% above the average premium price while nurses paid 10% lower which means that male nurses paid more of less same car insurance as their female counterparts of the same profession. This is a smart way to imply how insurance is affected by gender. The only exception in this case was found to be for the social workers. In spite of it being a female dominated industry, the professionals paid higher premiums owing to the fact that they mostly visit rural and deprived areas.

It was also observed that customers from male dominated industry mostly accrued higher premium until they reached the age of 50, after which the premium cost evened out for both the genders. Therefore, it has not been determined that, occupation is one of the most important aspects which insurers review before providing a quote to the consumers. Since some occupations are mostly held by either men or women, it leaves a scope for the insurers to make gender discriminations under it’s canopy.

How can customers keep their insurance premium in check?

Instead of worrying about how insurance is affected by gender, the only way one can benefit from lowest insurance prices is by conducted a detailed research on the web and comparing the prices offered by the various insurance companies. Sometimes, selection a profession on the insurance application form which is not detailed and specific might assist in saving a few quid towards your insurance premiums as insurers tend to make a huge discrimination in terms of their customers’ profession. Customers who intend to buy car insurance premium can consider adopting the black box technology which monitors the driver’s performance and duly assists the careful drivers in obtaining a lower insurance premium. It is also imperative to get in touch with the insurers or brokers and seek clarification about their insurance policies and premium.


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