The Court of Justice of the European Union ruled on 1 March 2011 that from next year insurers will not be able to use gender as a risk factor in deciding the price of insurance.
Gender is one of a number of factors historically used by insurance companies to calculate risk, alongside age, mortality rates and health status. It allows insurance to be more accurately priced to reflect individual risk.
Engage Mutual and the gender pricing ruling
As a customer owned business offering good value products at a fair price, our main aim at Engage Mutual will be to ensure that the ruling does not result in an automatic, collective increase to the price of our life insurance and annuity products.
There is a transition period before the gender pricing change takes effect on 21 December 2012. Our current understanding is that the ruling will not impact our existing life insurance and annuity customers, but we are waiting for further clarification on this.
Before changing our products and prices we will fully consider the potential effects of such changes to our customers, and we will aim to ensure that they are fully informed of the implications as appropriate.
Engage Mutual’s implementation of changes in response to the Gender Directive will ensure that the necessary measures are in place well before the December 2012 deadline.
why has this recent change come about?
The original Gender Directive proposed by the European Commission included a ban on the use of gender as a factor in insurance. But when the Directive was agreed in 2004, an exemption allowed the use of gender risk in pricing where it is based on relevant actuarial and statistical data (an example of this would be in relation to male and female life expectancy).
The removal of the exemption results from a challenge made by the Belgian Consumer Association (Test Achats) which was referred to the European Court of Justice (ECJ). The ECJ ruled on 1 March 2011 that the exemption is incompatible with the principle of gender equality and should end on 21 December 2012.
